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Dr Agarwal’s Health Care said to raise Rs160 crore from Edelweiss Fund

LiveMint logoLiveMint 05-07-2017 Swaraj Singh Dhanjal

Mumbai: Eye care chain Dr Agarwal’s Health Care Ltd is raising Rs160 crore in structured credit from Edelweiss Special Opportunities Fund (ESOF), two people aware of the development have said.

Dr Agarwal’s has about 70 eye care centres, mostly in southern India, apart from centres in countries such as Cambodia, Ghana, Mauritius, Mozambique, Nigeria and Rwanda.

The company runs its chain through Dr Agarwal’s Eye Hospital Ltd, a listed entity, where it holds around 71.75% stake.

“The company had started looking to raise funds towards the end of last year. They have recently concluded talks with ESOF. The funds will be utilized for growth requirements. The company is aiming to be a pan-India player and is looking at expanding the network both within and outside the country,” said one of the two people cited above, requesting anonymity as the talks are private.

In October, Mint had reported that Dr Agarwal’s had appointed an investment bank to help raise around Rs200-300 crore. (bit.ly/2upRJd6)

In April, Mint reported that Edelweiss Global Asset and Wealth Management has raised $350 million for its second credit-focused fund, Edelweiss Special Opportunities Fund (ESOF) II.

ESOF invests in privately negotiated collateralized credit transactions. ESOF I had raised $230 million.

Emails sent to the company were not answered.

Edelweiss declined to comment.

Dr Agarwal’s Health Care last raised funds from private equity investor ADV Partners. Hong-Kong based ADV invested $45 million in January 2016.

Evolvence India Life Sciences Fund had in 2012 acquired a minority stake in the company for Rs60 crore.

Dr Agarwal’s Eye Hospital’s revenue rose 8.7% to Rs148.54 crore in the year ended 31 March 2017, from Rs136.56 crore in the previous year, according to the company’s filings with stock exchanges.

It reported a profit of Rs6.57 crore in 2016-17, compared to a profit of Rs4 lakh in the previous year.

Healthcare delivery services such as hospitals, diagnostic chains and specialized treatment centres, like eye care, have been attracting strong private equity interest.

According to a report by Crisil Research, the Indian healthcare delivery market is expected to expand at a compounded annual growth rate (CAGR) of 12% to reach Rs6.8 trillion by 2019-20.

According to Crisil’s estimates, the size of the Indian healthcare delivery industry in 2014-15 was Rs3.8 trillion.

According to the report, change in age demographics and rising incomes, improvement in health awareness, changes in the disease profile (towards life-related ailments), rising penetration of health insurance and increasing opportunities from medical tourism will propel demand for healthcare facilities in India.

Supply side constraints are also fuelling investor interest, the report said.

In eye care, the industry has seen investments such as Singapore-based GIC’s $100 million investment in Vasan Healthcare, Matrix Partners’ Rs50 crore investment in New Delhi Centre For Sight in 2010 and Eye-Q Super Specialty Eye Hospitals’ Rs60 crore fund-raising from World Bank arm International Finance Corp., Helion Venture Partners and Nexus Venture Partners.

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