ET Bureau Updated: Dec 19, 2019, 10.00 AM IST
CHENNAI: Chennai-based eye care chain Dr. Agarwal’s Group of Eye Hospitals has raised Rs 215 crore in structured debt from the UK Government’s developmental finance arm CDC Group to power its Rs 500-cr expansion plan over the next three years.
The Temasek-backed Dr. Agarwal’s currently runs 91 hospitals, with a presence in African nations such as Zambia, Ghana and Mauritius, and an expanding footprint in India. It recently partnered with the Advanced Eye Institute in Navi Mumbai to enter the Mumbai market.
It runs two centres in Pune, and has more units coming in in Indore in Madhya Pradesh, and in Kochi and Kottayam in Kerala, where it already has a hospital running in Trivandrum.
“It will be a combination of greenfield and brownfield investments in Maharashtra, which will be a prime focus area in this expansion plan,” Amar Agarwal, Chairman of Dr. Agarwal’s Group of Eye Hospitals, told ET.
The eye care group, run by CEO Adil Agarwal, will target teaching 150 hospitals across the world by Fiscal year 2022-23 and touch a valuation of Rs 5,000 crore.
The Dr. Agarwal’s Hospital is targeting a daily walk-in count of one lakh across its centres by the end of its 3-year expansion plan. While cataract surgeries form a large part of its services segment, the eye care chain also runs allied businesses such as optical shops and pharmacies in its centres.
Amar Agarwal said his business was seeing an increasing demand for tertiary healthcare, such as the Glued IOL surgery to treat patients with complications in the lens. This is also partly the reason why the eye care chain is expanding on a hub-and-spoke model, wherein the high-end equipment are centralised but the outlying centres are equipped competitively to handle patients.
Dr. Agarwal’s aims reaching annual revenues of over Rs 1000 crore by the end of FY23. Its revenues were at Rs480 crore in FY19 and targets to cross Rs 600 crore in the current fiscal.
Dr. Agarwal’s has raised structured debt of close to Rs 200 crore earlier from other lenders which had been cleared in about 18 months, said Agarwal.
It had raised Rs 270 crore from Temasek early this year. The private equity investment has followed an investment of a similar amount from a fund advised by ADV Partners in 2016.
The CDC Group has Investments in 1,200 businesses across emerging economies and has targets to pump in $1.5 billion in Africa and Asia. The group has current portfolio value of £5.8 billion.
Mid-market investment bank Veda Corporate Advisors, assisted Dr. Agarwal’s in the CDC transaction.
"Eye care market in India is largely fragmented with many individual and small practices. We are witnessing a clear shift in patient preferences to the organized eye care chains with larger presence across cities," said VP Rajan, Associate Director at Veda Corporate Advisors, the mid-market investment bank that assisted Dr. Agarwal’s in the current transaction.