BackTPG, Temasek double down on Dr. Agarwal’s
The fresh infusion entirely comprised a primary issue and valued the company at ₹6,000 crore, said Dr. Amar Agarwal, chairman, Dr. Agarwal’s Group of Eye Hospitals.
PremiumMumbai: Dr. Agarwal’s Health Care Ltd has raised ₹650 crore ( $78 million) from existing investors TPG Growth and Temasek to bolster its aim of doubling its network of eye clinics in the country primarily through acquisitions.
The Chennai-based company will also consider a public listing in two to three years, said senior company executives.
The fresh infusion entirely comprised a primary issue and valued the company at ₹6,000 crore, said Dr. Amar Agarwal, chairman, Dr. Agarwal’s Group of Eye Hospitals. He said the company is aiming to have more than 300 clinics across India over the next two years, up from the current around 150 clinics.
Majority of the network expansion is expected to accrue from inorganic growth where the company has been acquiring established single clinic set ups and chain of organized clinics in Maharashtra, Gujarat, Punjab and Delhi, among its existing markets, said Adil Agarwal, chief executive.
“We are looking to acquire networks with 30-40 centres and to invest up to ₹400 crore behind the inorganic growth strategy of the company," he said. While 60% of the capital will be used towards brownfield assets, the company will look to deploy 30-40% of the funds to open over 100 primary eye clinics in tier II and tier III towns in the next few years.
Dr Agarwal’s had in May last year raised over ₹1,000 crore in funding from TPG Growth and Temasek, in one of the largest fundraisings in the eye care space.
Founded by Dr. Amar Agarwal in 1957 as a single facility in Chennai, the group currently offers eye care services such as cataract, laser correction, vitreo-retinal surgery, corneal transplantation, glaucoma and squint at its centres. Super-speciality eye care services such as pediatric ophthalmology, ocular oncology, neuro-ophthalmology, uvea and oculoplasty are also offered at its tertiary hubs.
Dr. Agarwal’s is also betting big on the African market where it currently runs 15 centres. The firm plans to add 10 centres across Kenya, Zambia, and Tanzania.
Asked whether the company has identified other global markets for expansion, Adil Agarwal said, “For now, opportunity in India is huge. We want to focus on growing in the domestic market for the next 5-10 years."
Over the next five years, the company wants to grow the network to 500 centres.
With earnings before interest, taxes, depreciation, and amortization or Ebitda margin of 22% and profit after tax of 12%, the company is looking to close the current financial year with ₹1,500 crore in revenue. “Over the next 2-3 years, the company is looking at growing the revenue to ₹2,500 crore, a compound annual growth rate of around 25-30%," Adil Agarwal said.
He said the company will also consider an initial public offering (IPO) over the next 24-36 months, he said. “We will begin our IPO preparations in the next 12 months," he added.
“We continue to be excited about the growth potential of the company and share the company’s vision of providing world class clinical outcomes along with compelling financial performance. Dr. Agarwal’s has the potential to become the global leader in eye care segment," Ankur Thadani, business unit partner in TPG Growth said in a statement.
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