The initial public offering (IPO) of leading eyecare service provider Dr Agarwal’s Healthcare commenced today. With a significant Offer for Sale (OFS) component worth Rs 2,727 crore out of the total offering valued at Rs 3,027 crore, the subscription period will remain open until January 31. The company has set its IPO price band between Rs 382 and Rs 402 per share, with each lot comprising 35 shares. Analysts have advised investors to consider subscribing for long-term benefits despite the high OFS structure and rich pricing. Dr Agarwal’s Healthcare operates in a rapidly growing industry, holding approximately 25% of India's eye care services market.

Dr Agarwal’s Healthcare has established itself as a prominent player in the Indian eyecare sector, offering an extensive range of services from surgical procedures to consultations and non-surgical treatments. Additionally, it sells optical products, contact lenses, accessories, and pharmaceutical goods related to eye care. The company's robust business model is structured around a hub-and-spoke network, ensuring scalability and accessibility. As of September 2024, this network encompasses 28 hubs and 165 spokes across India, serving over 2.13 million patients and performing more than 220,000 surgeries annually. This strategic setup positions the company well to capitalize on the projected 12-14% Compound Annual Growth Rate (CAGR) forecasted by CRISIL for the Indian eyecare industry from FY24 to FY28.

The IPO comes at a time when the company is poised for substantial growth. At the upper end of the price band, Dr Agarwal’s Healthcare is valued at 134 times its FY24 earnings per share (EPS). Despite concerns about the premium over the IPO price being only 3%, which reflects a muted Gray Market Premium (GMP), analysts like Anand Rathi maintain a positive outlook. They recommend subscribing to the IPO for long-term investment purposes, citing the company's strong market position and future prospects. The decline in GMP since the IPO announcement has not deterred investor interest, especially given the company's potential to benefit from industry tailwinds.

Investors are encouraged to evaluate the long-term potential of Dr Agarwal’s Healthcare. The company's significant market share, coupled with its scalable business model and the promising growth trajectory of the eyecare industry, presents a compelling case for investment. While the current GMP may be modest, the broader context of the company's operations and market opportunities suggests that the IPO could offer attractive returns over time. The forthcoming valuation based on FY24 earnings is expected to reach approximately Rs 12,698 crore, underscoring the company's financial strength and strategic positioning within the sector.