Dr Agarwal’s Health Care has raised Rs 215 crore from CDC, deveopment finance arm of the British government.
The money will support the company's Rs 500-crore investment plan to double its network. The eyecare chain is considering a public issue of stock in three years.
With the funding, CDC will get a seat on the company's board of directors. Veda Corporate Advisors, a mid-market investment bank, advised the company on the transaction.
Amar Agarwal, chairman of the Chennai-based chain, said they'd decided to raise the money in the form of structured debt, to avoid dilution in equity. Before this investment, the 63-year-old company was debt-free and had raised Rs 540 crore from Temasek and ADV Partners.
Market experts had earlier valued the company at around Rs 2,500 crore, expected to double with the proposed expansion. It has around 90 hospitals, including 14 in Africa. The plan is to increase this to 150 in three years. The expansion will be through organic, inorganic and partnership routes.
The company has tied up with Advanced Eye Institute to enter the Mumbai market and set up two projects in Pune. In the next three years, around 10 centres will be opened in Maharashtra, followed by hospitals in Kerala and Madhya Pradesh. The next phase of expansion outside India would be in South Asia and Europe.
Srini Nagarajan, managing director and Asia head of CDC, said: "Our 70-plus years track record of investing across Asia and Africa will help drive the Dr Agarwal group’s expansion plans. We will share our broad health care sector experience with this ambitious management team."
The group expects to close the year with around Rs 600 crore in revenue and to double this in three years. The company generates 20-25 per cent of revenue from related businesses.