Dr. Agarwal's Health Care Limited is all set to launch its Initial Public Offering (IPO) in January 2025, offering investors a chance to be part of a leading company in the Indian eye care market. This article delves into the details of Dr. Agarwal's Health Care IPO, its financial performance, market share, and what potential investors should know before participating.

Overview of Dr. Agarwal's Health Care Limited:

Dr. Agarwal's Health Care is a renowned player in India's eye care services sector, offering a comprehensive range of services, including cataract surgeries, refractive surgeries, and other specialized treatments. In addition to surgical services, the company provides consultations, diagnoses, non-surgical treatments, and the sale of opticals, contact lenses, accessories, and eye care pharmaceutical products. As of FY 2024, Dr. Agarwal's Health Care held a 25% market share in India's eye care service chain market, making it a dominant force in the industry.

IPO Details and Structure:

The Dr. Agarwal’s Health Care IPO is a book-built issue worth ₹3,027.26 Crores. The offering comprises a fresh issue of 74.62 lakh shares worth ₹300 Crores, and an Offer for Sale (OFS) of 678.42 lakh shares totaling ₹2,727.25 Crores. The IPO price band has been set between ₹382 and ₹402 per equity share, and the lot size for retail investors is 35 shares. Retail investors must invest a minimum of ₹14,070 to participate.

The IPO subscription period begins on January 29, 2025, and closes on January 31, 2025. Allotment is expected to be finalized by February 4, 2025, and the shares are slated for listing on the BSE and NSE by February 5, 2025.

Financial Performance and Key Metrics:

Dr. Agarwal’s Health Care has demonstrated impressive growth over the years, with revenues from operations in FY 2024 amounting to ₹8,379.40 million. The company has shown a consistent upward trend in its EBITDA and profit after tax (PAT), further underlining its operational efficiency and profitability. As of September 2024, the EBITDA stood at ₹2,284.77 million, and the PAT was ₹395.64 million.

Key financial metrics such as EPS for FY24 stand at ₹3.13 (pre-issue) and ₹2.63 (post-issue), with a P/E ratio of 128.43x pre-issue and 152.88x post-issue. Despite these premium valuations, the company maintains an impressive ROCE of 14.61% and ROE of 9.33%, indicating a healthy return on investments.

Market Sentiment and Grey Market Premium (GMP):

The Grey Market Premium (GMP) for Dr. Agarwal's Health Care IPO has been reported to be ₹44, reflecting a potential listing gain of 10.94%. It is important to note that the GMP is based on market speculation and does not guarantee any specific returns once the shares are officially listed. Investors should proceed with caution, as the GMP does not offer reliable price discovery.

Subscription Status:

The Dr. Agarwal’s Health Care IPO has been receiving robust demand during its subscription period. As of January 31, 2025, the IPO had been subscribed 1.55 times on its final day of the subscription period, a promising sign for potential investors. This indicates a strong investor interest in the offering, driven by the company’s market leadership and solid financial standing.

Anchor Investors and Investment Strategy:

Dr. Agarwal’s Health Care IPO has raised ₹875.51 Crores from Anchor Investors at a price of ₹402 per share, reflecting confidence in the company’s prospects. The allocation of 2,17,78,798 equity shares to these investors suggests strong institutional backing.

IPO Use of Proceeds:

The company plans to utilize the net proceeds from the IPO for repayment and prepayment of certain borrowings amounting to ₹1,950 million. Additionally, the funds will be used for general corporate purposes and potential acquisitions, further positioning the company for growth and expansion.

Investment Strategy:

Given its strong financials and industry leadership, the IPO offers an attractive opportunity for investors looking to diversify their portfolios. However, with the high P/E ratio and premium pricing, we recommend potential investors to exercise caution and avoid relying solely on listing gains. The IPO may be better suited for long-term investors who believe in the growth potential of the Indian eye care market.

The Upcoming IPOs in this week and coming weeks are Chamunda Electricals, Ken Enterprises, Amwill Healthcare, Readymix Construction, Eleganz Interiors.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.

Join our Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.