Dr Agarwal’s Health Care Ltd has raised Rs 1050 crore (around $136 million) from new investor TPG Growth and existing investor Temasek, in the largest private equity deal in the eye care space in India.
The deal comprises of primary infusion of funds and secondary transaction that involves the exit of its existing investor ADV Partners, said Dr Agarwal's in a statement.
A person familiar with the transaction said that around 50% constitutes primary capital.
VCCircle reported in September last year that Dr Agarwal's was looking at a fresh fundraise and ADV Partners would exit. ADV Partners had invested around $45 million Dr Agarwal's in 2016 to primarily pave the way for the exit of Evolvence India Life Sciences Fund.
Amar Agarwal, Chairman, Dr. Agarwal’s Group of Eye Hospitals, said in the statement that the fresh capital will be used to expand in the domestic and international markets and to deploy latest technologies for super-specialty eyecare.
The company, which started as a single facility in Chennai in the year 1957, currently has 105 hospitals spread across India and Africa. With the fresh funds, it aims to take its network to over 200 hospitals in the next three to four years.
Adil Agarwal, CEO, Dr. Agarwal’s Group of Eye Hospitals, said that the company will also be looking at acquisitions in key markets such as Maharashtra, Gujarat, Punjab, Karnataka, Andhra Pradesh and Telangana. In the international market, where it already has 15 centres in Africa, the company aims to deepen its presence in countries such as Kenya, Mozambique, Tanzania, and Ghana, he added.
Ankur Thadani, MD of TPG Growth, noted that the healthcare sector in India is a core focus for TPG.
"We are proud to be partnering with the number one private eyecare chain in the country to continue delivering critical eyecare to a market that has a disproportionately high incidence of visual impairment," added Thadani.
In the healthcare space in India, TPG Growth had previously invested directly in medical devices maker Healthium MedTech (formerly Sutures India), which it sold to Apax Partners in 2018. Its parent TPG has a stake in hospital chain Manipal Hospitals. In 2017, TPG Growth set up a separate healthcare platform – Asia Healthcare Holdings (AHH) – to invest in single-specialty hospitals. Earlier this year, AHH signed a definitive agreement for a $170 million investment from Singapore’s sovereign wealth fund GIC. In 2020, TPG Growth struck its first digital healthcare bet with its investment in PharmEasy.
Veda Corporate Advisors and Avendus Capital were the Financial Advisors to the company for this transaction.
Prior to this equity funding round, Dr Agarwal’s raised Rs 270 crore ($38 million) from Temasek in February 2019. Later that year, the company raised an additional Rs 215 crore ($30.3 million) in debt from British development finance institution (DFI) CDC Group Plc.
The was not the first time Dr Agarwal's was resorting to an alternative mode of funding. In 2017, the eye-care chain raised structured debt from Edelweiss Special Opportunities Fund for expansion.
The eye care market is expected to grow at the CAGR of 7.3%, valuing it at $2 billion by 2022, based upon this increasing burden of eye diseases and moderate growth in technological advancements.
Temasek's investment in Dr Agarwal's in 2019 had broken the prolonged lull in the eye care space by private equity investors. That year, apart from Dr Agarwal's a bunch of other eye care chains also received investment from new investors.
For instance, Mahindra Partners, the private equity arm of diversified Mahindra Group, invested Rs 206.5 crore (around $30 million) in New Delhi-based chain Centre for Sight. This deal paved the way for the full exit of venture capital firm Matrix Partners India.
ASG Hospital raised funding UAE-based family investment office Foundation Holdings. IIFL Asset Management Ltd acquired a majority stake in Infigo Life Sciences Pvt. Ltd, which is promoted by Shridhar Thakur, former chief operating officer of eye-care chain Vasan Healthcare, and Anil Kamath, former managing director at Wockhardt Hospitals.
