Dr Agarwal’s Eye Hospital Stock Slides 18% After Merger Approval with Parent Firm

Market Performance

Dr Agarwal's Eye Hospital stock faced sharp selling pressure on Thursday, August 28, after the company's board cleared the long-awaited merger with its listed parent, Dr Agarwal's Healthcare Ltd.

• The stock sank as much as 18% intraday, significantly impacting investor sentiment.
  
  
• At 1:15 p.m., shares traded at ₹4,476.35, down 13% from the previous day's close.
  
  
• Year-to-date, the stock has already slipped 31%, extending its downward trend.
  
  

The parent company, Dr Agarwal's Healthcare Ltd (AHCL), was not spared either—its shares dropped 6%, trading at ₹430 apiece.

Main News: Board Clears Merger

The board of Dr Agarwal's Eye Hospital approved a scheme of amalgamation with AHCL. The move involves a merger by absorption, where the hospital entity will be folded into the parent company.

The merger is subject to:

• Regulatory approvals
  
  
• Shareholder nods
  
  
• Execution of the agreed share swap arrangement
  
  

This announcement triggered heavy trading volumes as investors reacted to the development.

Company Details and Stakeholding

Dr Agarwal's Healthcare Ltd, which entered Dalal Street in February 2025, holds a controlling 71.90% stake in Dr Agarwal's Eye Hospital.

The share swap ratio has been structured as follows:

• 23 equity shares of AHCL (face value ₹1 each)
  
  
• For every 2 equity shares of AEHL (face value ₹10 each)
  
  

This ratio will apply to AEHL shareholders, excluding AHCL itself.

Background of the Deal

The merger had been on the cards for some time. AHCL's red herring prospectus had outlined a 3-year timeline for consolidation. However, management had earlier indicated that the process would begin soon after AHCL's listing, with a target completion date of within 12 months.

With this approval, the group has taken a decisive step toward building a simpler corporate structure.

Summary

• Dr Agarwal's Eye Hospital stock plunged 18% intraday after the board approved a merger with AHCL.
  
  
• Trading price: ₹4,476.35, down 13% as of mid-session.
  
  
• YTD performance: -31%, adding to investor concerns.
  
  
• Parent stock AHCL also fell 6% to ₹430.
  
  
• Merger details: 23 AHCL shares for every 2 AEHL shares.
  
  
• Stakeholding: AHCL owns 71.90% in AEHL.
  
  
• Next step: Regulatory and shareholder approvals.