Dr. Agarwal's Health Care Company, a leader in the eye care industry, is launching its IPO on January 29, 2025, offering investors a significant opportunity to participate in its growth story. The company specializes in cataract surgeries, refractive procedures, and a wide range of eye care services, holding a 25% market share in India’s eye care service chain market as of FY 2024, according to the CRISIL MI&A Report.

IPO Details

The IPO comprises a Book Built Issue amounting to ₹ 3,027.26 crore, which includes:

• A fresh issue of 74.62 lakh shares worth ₹ 300 crore.
• An Offer for Sale (OFS) of 678.42 lakh shares worth ₹ 2,727.26 crore.

The subscription period is open from January 29, 2025, to January 31, 2025. The allotment will be finalized on February 4, 2025, and the shares are expected to list on the BSE and NSE on February 5, 2025.

The price band is ₹ 382 to ₹ 402 per equity share, and the market capitalization at the upper price band is estimated to be ₹ 12,698.36 crore. Retail investors can subscribe with a minimum investment of ₹ 14,070 for 35 shares, while High-Net-Worth Individuals (HNIs) need to invest in 15 lots (525 shares), amounting to ₹ 2,11,050.

Financial Performance

Dr. Agarwal's Health Care has shown consistent growth in revenues and profits over recent years.

• Revenues for FY 2024 reached ₹ 13,764.49 million, up from ₹ 10,314.94 million in FY 2023.
• The company’s EBITDA for FY 2024 was ₹ 4,065.55 million, reflecting strong operational efficiency.
• Profit after Tax (PAT) stood at ₹ 950.51 million in FY 2024, with a pre-issue EPS of ₹ 3.13.

Despite strong financials, the IPO valuation is on the higher side, with a pre-issue P/E ratio of 128.43x and a post-issue P/E ratio of 152.88x, compared to the industry average P/E of 82x.

Grey Market Premium (GMP)

As of January 24, 2025, the Grey Market Premium (GMP) for Dr. Agarwal's Health Care IPO is ₹ 44, indicating potential listing gains of 10.94%. However, GMP trends are speculative and depend on demand and supply dynamics. Investors should focus on the company’s fundamentals rather than solely relying on GMP.

Objectives of the IPO

The funds raised through the IPO will be utilized for:

1. Repayment or prepayment of borrowings worth ₹ 1,950 million.
2. General corporate purposes and potential acquisitions.

Expert Review and Recommendations

Dr. Agarwal's Health Care has an excellent reputation for providing high-quality eye care services and is supported by marquee institutional investors like Temasek Holdings and TPG. However, the IPO appears fully priced, and the valuation metrics suggest limited room for immediate listing gains.

Given the high valuation and industry dynamics, we recommend avoiding the IPO for listing gains but suggest long-term investors evaluate based on their portfolio strategy and risk appetite.

How to Check Allotment Status

The IPO allotment will be available on February 4, 2025. Follow these steps to check the status:

1. Visit the registrar’s website (KFin Technologies).
2. Select “Dr. Agarwal's Health Care Limited IPO” from the dropdown list.
3. Enter your application number, PAN, or DP Client ID.
4. Click “Submit” to view your allotment status.

Conclusion

Dr. Agarwal's Health Care IPO provides an opportunity to invest in one of India’s leading eye care chains. However, high valuations and speculative GMP trends make it essential for investors to weigh the risks carefully. While long-term prospects are promising, short-term investors may find limited gains from listing.

The Upcoming IPOs in this week and coming weeks are Malpani Pipes And Fittings and Dr. Agarwal's Health Care.

The Current active IPO are H.M. Electro Mech, GB Logistics and CLN Energy.

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