Singapore-based Temasek Holdings has bought a minority stake in Chennai-based Dr Agarwal’s Healthcare for Rs 270 crore, its first investment in the eye-care segment and a single-speciality hospital chain in India. The company will use the funds to expand into underserved regions in India and to invest in new technology for super-speciality eyecare, it said in a stock exchange filing on Wednesday.
The expansion is planned through strategic partnerships, acquisitions and new hospitals, Adil Agarwal, chief executive officer of Dr Agarwal’s Group of Eye Hospitals, said in the statement.
The group is targeting doubling hospitals to 150 in 3-5 years from 76 across 13 states in the country at present.
Agarwal said the group plans to invest in cutting-edge technology including FemtoLaser and Robotic Cataract Surgery with the fresh funds, apart from expanding into eastern and central India. “We are looking at adding between 50-75 hospitals to our network over the next 3-5 years, with a major focus on metro cities as well as tier-II and tier-III towns,” he said.
The fresh investment will provide the needed fillip to help the group achieve its target of tripling turnover to Rs 1,500 crore within three years, according to Amar Agarwal, chairman of the group.
“The Agarwal Group is excited to welcome Temasek as an investor.
We believe their expertise and support will help our company expand our network of clinics and operations to better meet the growing demand for affordable and quality eye care across India,” he said.
Mid-market investment bank Veda Corporate Advisors advised the company on the transaction.
Shares of Dr Agarwal’s Eye Hospital gained 3.3% to Rs 375 at close on the BSE on Wednesday, bolstered by the fund-raise.
Asked why it has prioritised consolidation in India over foreign expansion with the new round of funds, CEO Agarwal said, “We want to focus on India now as we have already covered regions that fit our business model. We operate on an asset-light model without significant capex requirement and this should help us consolidate our growth in India.”
Source: Economic Times