The eye-care chain Dr Agarwal’s Healthcare Ltd has announced that it will soon raise $24.6 million in debt from Edelweiss Financial Services Ltd’s Edelweiss Special Opportunities Fund II.
This is the second round of funding in the company in one-and-a-half years. In February 2016, the eye-care chain raised $45 million from Hong Kong-based private equity firm ADV Partners, which also gave an exit to Evolvence India Life Sciences Fund.
“For a company of our size we have already gone for two rounds of equity funding. So now doing a structured debt or mezzanine financing gives us the flexbility to access capital on preferential terms without having to dilute equity,” Adil Agarwal, CEO at Dr Agarwal’s Healthcare talking to VCCircle.
He also added that retaining equity is important for the company at this point in time because it may eventually have to go to the market later for another equity funding round.
The Chennai-based company will use Edelweiss’ special opportunities fund to expand its listed eye-care hospital chain across the country and launch its first hospital overseas, in the Middle East. It also plans to invest in research and development.
In India, the company plans to start operations in states like Madhya Pradesh, Uttar Pradesh, Bihar and Jharkhand; and strengthen its presence in its existing markets such as Maharashtra, West Bengal, Gujarat and Kerala.
The eye-care chain, founded by Jaiveer Agarwal in 1957, has a network of 70 centres and aims to take the number to 150 by 2020. It registers its major presence in Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Odisha, Rajasthan and the Andaman islands. Besides, it also has 14 centres in Africa and expects to add two more centres in Kenya and Tanzania.
The company is betting big in African nations. Compared to India, it has larger centres in Africa as they are built to cater to the entire country.
According to the CEO, the company has been growing at a CAGR 25 per cent over the past five years. It clocked a revenue of Rs 400 crore in the last fiscal and expects to touch Rs 500 crore this year.
In 2012, Singapore sovereign wealth fund GIC Pte Ltd invested $100 million for a minority stake in Chennai-based eye-care chain Vasan Healthcare.
The eye-care company is operating in a market, which is expected to touch $3 billion by 2020. The segment has seen a lot of investor activity in recent years.