Dr. Agarwal's Health Care Limited and Dr. Agarwal's Eye Hospital Limited announce Merger

The Boards of Directors of Dr. Agarwal's Health Care Limited ("AHCL" or the "Company") and Dr. Agarwal's Eye Hospital Limited ("AEHL") at their respective meetings held today have approved the scheme of amalgamation ("Scheme") of these independently listed companies under the Dr. Agarwal's Group. The Scheme is subject to the requisite approvals from respective shareholders of AHCL and AEHL and the applicable regulatory approvals.

The merged entity inter-alia brings together significant complementarities that exist between both the entities and is poised to create meaningful value for various stakeholders, including respective patients, employees, and shareholders of both entities. The merger will consolidate the businesses of AHCL and AEHL into a single entity, enabling operational and financial efficiencies through streamlined functions and agile decision-making. It will provide unified capital allocation and a stronger balance sheet to support future growth, alongside a simplified legal, regulatory and governance framework. Overall, the transaction is expected to enhance shareholder value and be EPS accretive from the first year of implementation.

Further, AHCL was listed on the Stock Exchanges on February 4, 2025, pursuant to an initial public offering of its Equity Shares. In its prospectus dated January 31, 2025, AHCL disclosed its intention to explore a potential merger with AEHL within three (3) years from the date of listing, subject to receipt of requisite approvals in furtherance of which, AHCL and AEHL are entering into the Scheme.

Pursuant to the share exchange ratio set out in the Scheme , AHCL will issue and allot 23 new equity shares of the face value of Re. 1/- each, credited as fully paid-up, for every 2 equity shares of the face value of Rs. 10/- each fully paid-up held by the eligible shareholders in AEHL (other than AHCL's existing stake).

Additionally, the Board of Directors of AEHL have also approved a preferential issue of approximately ₹70 crores, comprising 1,32,827 equity shares at an issue price of ₹5,270 per share, representing 2.7% of AEHL's equity share capital. This is subject to receipt of requisite approvals under applicable law. Upon the completion of the preferential issue, the issued, subscribed and paid-up equity share capital of AEHL will increase to the extent of the equity shares issued. This preferential allotment shall have no impact on the eventual public shareholding of the merged entity.

Speaking on the announcement of the merger, Dr. Adil Agarwal, CEO, Dr. Agarwal's Health Care Limited said, "The merger is an important strategic step in the Group's journey and will help unlock the full potential of the combined businesses. This long-awaited step towards building a simpler and more efficient group structure reflects our commitment to creating significant value for our stakeholders in the long term. We have been working diligently towards this milestone and, as committed to each of you, remain determined to complete the merger process at the earliest. We firmly believe that the approved swap ratio is fair, balanced, and in the best interests of all stakeholders, laying a strong foundation for the next phase of our growth."

Kotak Investment Banking is the transaction advisor and fairness opinion provider to AHCL for the Scheme. Motilal Oswal is the fairness opinion provider to AEHL for the Scheme. PwC Business Consulting Services LLP and Bansi S. Mehta Valuers LLP, the independent valuers, acted as the valuation advisors and have recommended the share exchange ratio for the Merger. Trilegal acted as the legal advisor.

Shares of Dr. Agarwals Health Care Limited was last trading in BSE at Rs. 459.65 as compared to the previous close of Rs. 460.30. The total number of shares traded during the day was 5429 in over 425 trades.

The stock hit an intraday high of Rs. 462.65 and intraday low of 451.00. The net turnover during the day was Rs. 2486421.00.

Shares of DR.AGARWALS EYE HOSPITAL LTD. was last trading in BSE at Rs. 5145.65 as compared to the previous close of Rs. 5323.45. The total number of shares traded during the day was 2553 in over 592 trades.

The stock hit an intraday high of Rs. 5348.40 and intraday low of 5075.00. The net turnover during the day was Rs. 13152551.00.

Source : Equity Bulls

Keywords

DrAgarwalsHealthCare INE943P01029 EyeHospital DRAGARWALSEYEHOSPITAL INE934C01018 HealthcareServices Merger