Dr. Agarwals Healthcare IPO: A Comprehensive Guide for Investors
The much-anticipated Dr. Agarwals Healthcare IPO is set to open on 29th January 2025. With an estimated issue size of ₹3,027.26 crore, this book-built IPO has already captured the attention of brokers and investors alike. The tentative listing date for the IPO is 5th February 2025. This article provides a detailed analysis of the IPO, including its structure, key financials, investment prospects, and critical factors to consider.
IPO Details at a Glance
| Attribute | Details |
|---|---|
| IPO Open Date | 29th January 2025 |
| IPO Close Date | 31st January 2025 |
| Face Value | ₹1 per share |
| Price Band | ₹382 to ₹402 per share |
| Lot Size | 35 shares |
| Issue Size | 7,53,04,970 shares (₹3,027.26 crore) |
| Listing Date | 5th February 2025 |
| Listing At | BSE and NSE |
The IPO comprises a fresh issue of 754,62,686 shares and an offer for sale (OFS) of 6,78,42,284 shares. The fresh issue will help the company raise new funds, while the OFS allows existing shareholders to divest part of their holdings. Kfin Technologies Limited, the registrar for this IPO, is responsible for managing the allotment process and refund initiation.
Key Dates for Dr. Agarwals Healthcare IPO
Investors must note the following key dates:
| Event | Date |
|---|---|
| IPO Open Date | 29th January 2025 |
| IPO Close Date | 31st January 2025 |
| Allotment Date | 3rd February 2025 |
| Refund Date | 4th February 2025 |
| Listing Date | 5th February 2025 |
Grey Market Premium (GMP) Insights
As of 24th January 2025, Dr. Agarwals Healthcare IPO’s Grey Market Premium (GMP) stands at ₹85, indicating an estimated listing price of ₹487 per share. The GMP suggests a potential 21.14% listing gain based on the upper end of the price band (₹402). However, GMP figures are subject to fluctuations influenced by market sentiments and demand.
| Date | GMP (₹) | Estimated Listing Price (₹) | Listing Gain (%) |
|---|---|---|---|
| 24th January 2025 | 85 | 487 | 21.14 |
Monitoring GMP data daily can provide better insights into the IPO’s market sentiment and expected performance.
Financial Highlights
Dr. Agarwals Healthcare Limited has demonstrated strong financial growth, despite a slight decline in profits. Below is a detailed snapshot of its financial performance:
| Financial Metric | FY23-24 (₹ Cr.) | FY22-23 (₹ Cr.) | Growth (%) |
|---|---|---|---|
| Revenue | 1,376.45 | 1,031.49 | 33.44 |
| Net Worth | 1,337.68 | 627.83 | 113.06 |
| Profit After Tax (PAT) | 95.05 | 103.23 | -7.92 |
| Assets | 2,752.82 | 1,825.17 | 50.88 |
- The 33.44% increase in revenue highlights the company’s strong operational performance.
- The 113.06% growth in net worth reflects its solid financial foundation.
- A slight decline in PAT (-7.92%) may raise concerns, but it is offset by the company’s overall growth trajectory.
Dr. Agarwals Healthcare’s consistent performance showcases its ability to expand even in challenging market conditions, making it an attractive option for investors seeking stability and growth in the healthcare sector.
Technical Analysis
Technical analysis provides insights into the company’s valuation and growth potential. Below are key metrics:
| Indicator | Value |
|---|---|
| PE Ratio | 130.44 |
| PB Ratio | 7.96 |
| EPS (Earnings Per Share) | 3.08 |
| ROE (Return on Equity) | 9.33% |
| Debt-to-Equity Ratio | 0.70 |
| ROCE (Return on Capital Employed) | 14.61% |
The Price-to-Earnings (PE) Ratio of 130.44, while high, is typical for growth-oriented sectors like healthcare. The Debt-to-Equity Ratio of 0.70 underscores the company’s sound financial management. Furthermore, the ROCE of 14.61% indicates effective use of capital resources, positioning Dr. Agarwals Healthcare as a competitive player in its industry.
Peer Comparison
Dr. Agarwals Healthcare Limited competes with prominent players in the healthcare sector. Here’s how it stacks up:
| Company Name | Revenue (₹ Cr.) | PE Ratio | EPS (₹) | ROE (%) | NAV (₹) |
|---|---|---|---|---|---|
| Dr. Agarwals Healthcare Ltd. | 1,376.45 | 130.44 | 3.08 | 6.21 | 50.53 |
| Apollo Hospitals Enterprise Ltd. | 4,940.70 | 84.13 | 82.28 | 15.67 | 521.15 |
| Fortis Healthcare Ltd. | 1,790.42 | 73.16 | 8.69 | 1.37 | 103.94 |
| Narayana Hrudayalaya Ltd. | 1,280.00 | 34.82 | 38.11 | 27.29 | 156.86 |
While Dr. Agarwals has strong revenue, its ROE and EPS indicate room for improvement compared to industry leaders like Apollo Hospitals and Narayana Hrudayalaya. However, its diversified operations and steady growth make it a strong contender, particularly in underserved markets.
Reservation Categories
As per SEBI regulations, shares are reserved for different investor categories:
| Investor Category | Reserved Quota (%) |
|---|---|
| QIB (Qualified Institutional Buyers) | <50% |
| NII (Non-Institutional Investors) | >15% |
| Retail Investors | >35% |
Retail investors can bid for a minimum of 1 lot (35 shares) worth ₹14,070 and a maximum of 14 lots (490 shares) worth ₹1,96,980.
Objectives of the IPO
The IPO aims to raise ₹3,027.26 crore, which will be utilized for the following purposes:
- Debt Repayment:
- The company plans to repay borrowings worth ₹373.68 crore, reducing interest expenses and improving financial stability.
- General Corporate Purposes:
- Funds will also be used for corporate expenses and potential acquisitions to drive growth.
Pros and Cons of Dr. Agarwals Healthcare IPO
Pros:
- Strong revenue and net worth growth.
- Diversified operations across 117 cities.
- Focused on reducing debt, enhancing financial stability.
- Improved inventory turnover ratio, indicating operational efficiency.
- Robust market presence in both metro and non-metro cities.
Cons:
- Decline in PAT in FY23-24 may concern some investors.
- High competition in the healthcare sector.
- PE Ratio of 130.44 could deter value-focused investors.
How to Apply for Dr. Agarwals Healthcare IPO
To apply for the IPO, follow these steps:
- Research: Review IPO details, GMP, and financials.
- Demat Account: Open a demat account with a broker offering IPO services.
- Place a Bid: Select the lot size based on your investment capacity.
- Mandate Approval: Approve the mandate request to block funds.
- Allotment Status: Check allotment on 3rd February 2025 via BSE or the registrar’s portal.
Conclusion
Dr. Agarwals Healthcare IPO presents a compelling opportunity for investors, backed by strong financials, a diversified presence, and robust growth potential. The company’s focus on debt reduction, operational efficiency, and market expansion aligns with long-term value creation. However, investors must weigh the pros and cons, consider market conditions, and conduct thorough research before investing. With an estimated listing gain of 21.14% and increasing demand in the healthcare sector, this IPO holds promise for substantial returns.
Disclaimer: This article is for informational purposes only. Please consult a financial advisor and review the RHP before making investment decisions.
ALSO READ: H.M. Electro Mech Limited IPO: Should You Invest?
