Dr Agarwal’s Health Care IPO Day 1: Issue subscribed 7%; should you subscribe?
The public issue attracted bids for 38,08,980 shares against the 5,35,26,172 shares on offer.
![Dr Agarwal’s Health Care IPO Day 1: Issue subscribed 7%; should you subscribe?](https://cdn.zeebiz.com/sites/default/files/2025/01/29/348915-businessman-hand-touching-ipo-initial-public-offering-sign-virtual-screen493343-299591.jpg?im=FitAndFill=(1200,900))
The initial public offering (IPO) of Dr Agarwal’s Health Care Ltd, backed by Temasek Holdings and TPG, saw a 7 per cent subscription on the first day of bidding on Wednesday, January 29, 2025. The Rs 3,027.26 crore public issue launched with a price band between Rs 382 and Rs 402/share and will be concluded on January 31, 2025.
The public issue attracted bids for 38,08,980 shares against the 5,35,26,172 shares on offer. Meanwhile, the Retail Individual Investors (RIIs) portion was subscribed 11 per cent, and the non-institutional investor category recorded a 6 per cent subscription.
Should you subscribe to Dr Agarwal’s Health Care IPO?
Zee Business Managing Editor Anil Singhvi suggests that only high-risk investors should consider subscribing to the IPO, citing the following factors:
Positives:
- Experienced and professional promoters
- Strong brand with market leadership
- Asset-light business model
- Presence of reputed anchor investors
Negatives:
- Low entry barriers and intense competition in the sector
- Despite being an old company, business growth has picked up only recently
- Only ₹300 crore is a fresh issue, while ₹2,727 crore is an Offer for Sale (OFS)
- Valuation considered expensive compared to industry peers
Ahead of the share sale process, the healthcare company raised Rs 875.5 crore from anchor investors.
It comprises a fresh issue of up to Rs 300 crore and an offer for sale (OFS) of 6.78 crore equity shares, worth Rs 2,727.26 crore at the upper price band.
Why is the company raising Rs Rs 3,027.26 crore?
Proceeds from the fresh issue will be used to repay Rs 195 crore in debt, and the remaining funds allocated for general corporate purposes and potential inorganic acquisitions.
Who are BRLMs?
The book-running lead managers for the IPO are Kotak Mahindra Capital, Morgan Stanley India, Jefferies India, and Motilal Oswal Investment Advisors.
What does Dr Agarwal’s Health Care do?
Dr Agarwal’s Health Care is a leading eye care services provider and offers treatments such as cataract and refractive surgeries, consultations, diagnostics, non-surgical treatments. It is also in a business selling optical products, contact lenses, accessories, and eye care-related pharmaceutical items. As of September 2024, the company operated 193 facilities in several regions like South India; Chennai, Hyderabad, and Bengaluru, followed by Western India.
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