Dr. Agarwals Health Care offersa comprehensive range of eye care services, including cataract and refractive surgeries, consultations, diagnoses, non-surgical treatments, and the sale of optical products, contact lenses, accessories, and eye care-related pharmaceutical items.

Provides surgeries for various eye ailments, including cataract, corneal, retinal, refractive, and other conditions. Additionally, offers treatments such as glaucoma care, squint treatments, and oculoplasty surgeries, among others. Key surgical capabilities include intraocular lens procedures, corneal transplantation, pinhole pupilloplasty, single-pass four-throw pupilloplasty, and LASIK surgeries.

In H1 FY25, income from surgeries accounted for 65.58% of total revenue, consultation 5.34%, treatments and investigations 7.89%, sales of opticals, contact lenses, and accessories 12.83%, sales of pharmaceutical products 8.02%, and others 0.34%.

Holds a market share of approximately 25% of the total eye care service chain market in India during the Financial Year 2024.

As of September 30, 2024, there were 737 doctors providing care to patients across the 209 facilities. Served 1.15 million patients and conducted 140,787 surgeries during the six months ended September 30, 2024.

Facilities are divided into three types: (1) Primary Facilities, which offer basic eye care diagnosis and services, (2) Secondary Facilities, which provide services like cataract surgeries and some investigations, and (3) Tertiary Facilities, which specialize in complex surgeries like retinal and corneal treatments, and include three centres of excellence (COEs) that offer training and academic programs in ophthalmology.

As of September 30, 2024, its network in India includes 193 facilities across 117 metro and non-metro cities spanning 14 states and 4 union territories as of September 30, 2024. In addition to operations in India, commenced international operations in 2012 and as of September 30, 2024, operate 16 Facilities across nine countries in Africa, providing a range of eye care services, including treatments for cataract, glaucoma, diabetic retinopathy, retinal detachment, and dry eye, along with refractive surgeries, and paediatric and neuro ophthalmological treatments.

In H1 FY25, its 113 emerging facilities accounted for 29% of total revenue, while the 96 mature facilities contributed 71%.

In H1 FY25, 90% of its revenue came from India, while 10% was generated from exports.

The business operations follow a "hub and spoke" model, designed to create a scalable and accessible platform for ongoing growth. Out of the 193 facilities, 28 serve as hubs (tertiary facilities), including three Centers of Excellence (COEs), while the remaining 165 are spokes, consisting of 53 Primary Facilities and 112 Secondary Facilities.

Acquires clinical establishments and hospitals as part of its growth strategy. Over the years, several acquisitions have been made. In 2020, 8 facilities were acquired, including the Advanced Eye Institute in Mumbai. In 2022, another 8 facilities were acquired, including Aditya Jyot Eye Hospital in Mumbai. In 2023, 21 facilities were acquired, including Sri Ramachandra Eye Hospital in Tamil Nadu. In 2024, 16 facilities were acquired, and in 2025, 7 facilities were acquired, including those operated by Dr. Third Eye Care.

Plans are in place to merge with Dr. Agarwal‘s Eye Hospital, a listed material subsidiary engaged in a similar business, with the intention of completing the merger within three years of the listing. Moreover, intend to deepen presence in underpenetrated clusters through acquisition-led inorganic expansion strategy.

Plans to further explore expansion opportunities in India by establishing new facilities to broaden its geographic presence and enhance patient reach.

Offer and its objects

The IPO comprises fresh issue of equity shares worth up to Rs 300 crore and an offer for sale (OFS) of 6,78,42,284 equity shares aggregating up to Rs 2727.26 crore by existing shareholders.

Price band for the IPO is Rs 382 to Rs 402 per equity share of face value Re 1 each.

The objectives of the fresh issue include Rs 195 crore for the repayment/prepayment of certain borrowings, with the remaining amount allocated for general corporate purposes.

The promoters are Dr. Amar Agarwal, Dr. Athiya Agarwal, Dr. Adil Agarwal, Dr. Anosh Agarwal, Dr. Ashvin Agarwal, Dr. Ashar Agarwal, Dr. Agarwal’s Eye Institute, Dr. Agarwal’s Eye Institute, Dr. Amar Agarwal Family Trust, Dr. Adil Agarwal Family Trust, Dr. Anosh Agarwal Family Trust, Dr. Ashvin Agarwal Family Trust, and Dr. Ashar Agarwal Family Trust. The promoters and promoter group hold an aggregate of 11,63,59,650 equity shares, aggregating to 37.73% of the pre-offer issued and paid-up equity share capital. Their post IPO shareholding is expected to be around 32.53%.

The issue, through the book-building process, will open on 29 Jan 2025 and will close on 31 Jan 2025.

Strengths

Largest eye care services provider in India by revenue in FY 2024, with about 25% market share in the country‘s eye care sector. Also had the most eye care facilities in India as of September 30, 2024.

Integrated hub and spoke model enables supports high patient volumes and yields economies of scale, allowing greater accessibility and choice to patients while driving efficiency of crucial doctor resources across the network.

Wide network maximizes patient reach and enhances brand visibility in both urban and rural areas.

Provides comprehensive, end-to-end eye care services, enabling it to meet all of patients‘ ophthalmic needs.

Well positioned to benefit from growth in the Indian eye care industry supported by increasing prevalence of eye disorders, technological advancements, and rising disposable incomes.

The successful acquisitions over the years highlight the ability to identify and capitalize on valuable inorganic growth opportunities, as well as the capacity to integrate acquired businesses under a unified brand with standardized clinical and operational protocols.

Extensive experience of promoters and senior management personnel.

Weaknesses

Operates in a regulated industry. Any failure to comply with applicable safety, health, environmental, labor, and other regulations could adversely affect the business.

Pursue strategic acquisitions as part of its growth strategy. However, some acquisitions may be time-consuming to complete and may not contribute positively to the overall business, leading to higher integration costs due to regulatory complexities.

The equity shares of one of its material subsidiaries, Dr. Agarwal’s Eye Hospital, are listed on the BSE. This subsidiary has previously been found to be non-compliant with listing requirements, and any future non-compliance could negatively affect the business and reputation.

Exposed to legal claims and regulatory actions arising from malpractice and medical negligence, which could adversely affect the business.

Of its 193 facilities in India, 70 are situated in Tamil Nadu, creating a heavy reliance on a single state. This concentration could expose the company to risks in the event of regional economic or regulatory challenges.

Two relatives of the promoters, Sunita Rana Agarwal and Pankaj Sondhi, have not consented to being recognized as members of the Promoter Group and have not provided any information about themselves or their relevant entities as part of the Promoter Group. This raises concerns regarding governance and transparency.

There have been delays in the payment of certain statutory dues in the past. Any future failure or delay in settling such dues may attract regulatory action, as well as significant penalties.

Valuation

Net sales increased 31% to Rs 1332.15 crore in FY2024 as compared with FY2023. The OPM improved 63 bps to 27.19%, leading to 34% increase in OP to Rs 362.26 crore. OI increased 228% to Rs 44.3 crore. Interest cost rose 33% to Rs 95.62 crore. Depreciation cost went up 33% to Rs 170.37 crore. PBT surged 68% to Rs 140.57 crore. Tax expenses were Rs 45.52 crore as compared with tax credit of Rs 19.64 crore. Minority interest increased 31% to Rs 11.99 crore. Net profit decreased 12% to Rs 83.06 crore.

In H1 FY2025, net sales increased 26% to Rs 820.06 crore as compared to H1 FY2024. The OPM improved 13 bps to 25.68%, leading to 27% increase in OP to Rs 210.6 crore. OI increased 48% to Rs 17.88 crore. Interest cost rose 21% to Rs 55.43 crore. Depreciation cost went up 37% to Rs 112.69 crore. PBT surged 20% to Rs 60.35 crore. Tax expenses were Rs 20.79 crore as compared to Rs 19.24 crore. Minority interest increased 66% to Rs 11 crore. Net profit increased 17% to Rs 28.56 crore.

The TTM EPS on post-issue equity works out to Rs 2.8. At the upper price band of Rs 402, P/E is 146.

As of December 31, 2024, the total outstanding borrowings stood at Rs 360.54 crore. Of this, 54% will be repaid using the issue proceeds, significantly reducing interest costs and increasing profit. If the interest cost is lowered, the TTM EPS would rise to Rs 3.4, assuming all other factors, including the tax rate, remain unchanged. At the upper price band, the revised P/E ratio remains relatively high at 118.

Although there are no Indian listed players in the eye care services sector with a size and scale comparable to Dr. Agarwal‘s Health Care. Players such as Dr. Agarwal‘s Eye Hospital, its listed material subsidiary, Lotus Eye Hospital & Institute, a smaller eye care service provider, Ajanta Pharma, known for its eye care products, and Apollo Hospitals Enterprise, a large hospital with a renowned ophthalmology department, can be considered for comparison.

Dr. Agarwal‘s Eye Hospital, reported a 24.33% increase in net sales to Rs 202.21 crore for the first half of FY25 compared to the same period in FY24. Its operating profit margin improved from 28.20% to 30.31%, resulting in a 33.65% rise in operating profit, reaching Rs 61.29 crore. Other income increased by 46.45% to Rs 2.68 crore, while interest provisions grew by 102.42% to Rs 6.7 crore. Depreciation provisions rose 57.75% to Rs 19.23 crore. Profit before tax increased by 18.17% to Rs 38.04 crore, with tax provisions at Rs 9.78 crore, up from Rs 8.06 crore. As a result, profit after tax climbed 17.12% to Rs 28.26 crore. The shareholding of the entity in the listed material subsidiary stands at 71.9% as of December 2024. As of January 28, 2025, Dr. Agarwal‘s Eye Hospital was trading at a TTM P/E of 42. Its OPM and ROE for FY2024 were 28.52% and 29.5%, respectively.

Other listed peers such as Lotus Eye Hospital & Institute traded at TTM P/E of 96, Ajanta Pharma trades at TTM P/E of 38, and Apollo Hospitals Enterprise at TTM P/E of 81 as on 28 January 2025. The OPM and ROE stood at 27.19% and 9.33% respectively, in FY 2024. These were 13.54% and 4.9% for Lotus Eye Hospital & Institute, 27.85% and 22.87% for Ajanta Pharma, and 12.54% and 12.95% for Apollo Hospitals Enterprise, respectively.