AHCL, which debuted on Indian stock exchanges on Feb 4 following its IPO, had disclosed in its Jan 31 prospectus the intention to evaluate a merger with AEHL within three years. Photo courtesy: Wikimedia Commons
Dr Agarwal’s Health Care, Eye Hospital units to merge in strategic consolidation
The amalgamation of AHCL and AEHL aims to streamline operations, simplify governance, and create long-term value for shareholders
Dr Agarwal’s Health Care Ltd and Dr Agarwal’s Eye Hospital Ltd, both independently-listed entities under the Dr Agarwal’s Group, have announced a merger aimed at streamlining operations and driving strategic alignment across the group’s healthcare platforms.
The boards of both companies approved the scheme of amalgamation on Wednesday (August 27), subject to requisite shareholder and regulatory approvals, the companies said in a joint statement. The proposed merger is expected to enhance financial agility, optimise capital allocation, and simplify the group’s legal and governance framework.
Terms of the deal
Under the terms of the deal, AHCL will issue 23 new equity shares of face value Re 1 each for every two fully paid-up equity shares of Rs 10 each held in AEHL, excluding AHCL’s existing stake in AEHL. The transaction is projected to be earnings-per-share (EPS) accretive from the first year of implementation.
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“The merger is an important strategic step in the Group’s journey and will help unlock the full potential of the combined businesses,” said Dr Adil Agarwal, CEO of AHCL. “It reflects our commitment to creating long-term value for all stakeholders through a simpler and more efficient structure.”
Preferential allotment
AEHL’s board has also approved a preferential allotment of approximately Rs 70 crore, comprising 1,32,827 shares at Rs 5,270 apiece, representing 2.7 per cent of its equity capital. The issuance, subject to legal and regulatory approvals, will not impact the eventual public shareholding of the merged entity.
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AHCL, which debuted on Indian stock exchanges on February 4 following its IPO, had disclosed in its January 31 prospectus the intention to evaluate a merger with AEHL within three years. Wednesday’s announcement marks a significant milestone towards that goal.