Dr Agarwal’s Healthcare IPO Day 1: GMP, subscription status to review. Apply or not?

Dr Agarwal Healthcare IPO: Dr Agarwal's Health Care, backed by Temasek Holdings and TPG, launched its public issue on Wednesday, January 29. The three-day issue will close for subscription on Friday, January 31. The company seeks to raise ₹3,027.26 crore through the IPO at a price band of ₹382 to ₹402 per share. Before the public offering, it successfully raised over ₹875.5 crore from anchor investors.

The issue allocation is structured to cater to various investor groups, with 50% reserved for qualified institutional buyers, 35% for non-institutional investors, and the remaining 15% for retail investors.

Dr Agarwal's Health Care provides a comprehensive range of eye care services, including cataract and refractive surgeries, consultations, diagnostics, non-surgical treatments, and a variety of optical products, such as contact lenses, accessories, and pharmaceuticals related to eye care.

As of September 2024, the company operates 193 facilities, primarily situated in South India, with significant operations in Chennai, Hyderabad, and Bengaluru, as well as expanding presence in Western India.

Dr Agarwal Healthcare IPO subscription status

The initial public offer of Dr Agarwal IPO has been subscribed 7% on the first day of subscription, as per BSE data.

The initial share sale received bid for 38,17,800 shares against 5,35,26,172 shares on offer, according to BSE.

The portion for retail investors received 11% subscription while the quota for non-institutional investors got subscribed 6%. The qualified institutional buyers (QIBs) part is yet to be booked. The employee portion was subscribed 9%, while the portion reserved for shareholders was booked 14%.

Dr Agarwal's Healthcare IPO Review

Mehta Equities

Rajan Shinde, a Research Analyst at Mehta Equities Ltd, believes that Dr. Agarwal’s presents an opportunity for investors to engage with India’s largest eye care service provider by revenue in FY2024, which commands a significant 25% share in the organised sector. Shinde notes that the company’s vast network of 193 facilities spread across 14 states and 4 union territories in India, as well as 16 locations in 9 African nations, underscores its capacity to serve a wide range of demographics, further reinforcing its position as a market leader.

“We believe its organic growth strategy and focus on expanding the primary facility network position it well to capture this growing demand. Hence, looking at all attributes we recommend our investors to “SUBSCRIBE” the Dr Agarwal’s Health Care Ltd IPO for long-term perspective only,” added Shinde.

Anand Rathi

As per the brokerage, the company's valuation reached 134 times its FY24 EPS at the upper limit. After the equity shares are issued, the market capitalisation of the company would be ₹1,26,983.7 million, resulting in a market cap-to-sales ratio of 9.5 based on its FY24 earnings. The firm holds approximately 25% of the market share in the eye care services sector.

“We believe that the issue is richly priced and recommend “Subscribe – Long Term” rating to the IPO,” the brokerage said.

Dr Agarwal's Healthcare IPO Details

Dr Agarwal's IPO consists of a new issue of up to ₹300 crore alongside an Offer for Sale (OFS) of up to 6.78 crore equity shares valued at ₹2,727.26 crore by promoters and other shareholders at the highest point of the price range. The entities participating in the OFS include Arvon Investments Pte Ltd, Claymore Investments (Mauritius) Pte Ltd, and Hyperion Investments Pte Ltd.

The funds raised from the new issue amounting to ₹195 crore will be allocated for debt repayment, along with a share set aside for general corporate activities and undisclosed acquisitions. The book-running lead managers for the issue are Kotak Mahindra Capital Company, Morgan Stanley India Company, Jefferies India, and Motilal Oswal Investment Advisors.

Dr Agarwal's Healthcare IPO GMP today

Dr Agarwal's IPO GMP today is +12. This indicates Dr Agarwal's Healthcare share price was trading at a premium of ₹12 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Dr Agarwal's Healthcare share price is indicated at ₹414 apiece, which is 2.99% higher than the IPO price of ₹402.

Today's IPO GMP is pointing lower and is predicted to decline further based on grey market activity over the last five sessions. According to experts on investorgain.com, the lowest GMP is ₹12, and the highest is ₹54.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.