Shares of Dr Agarwal’s Eye Hospital Ltd (AEHL) plunged as much as 18 per cent on Thursday, August 28, after the company announced a merger with its listed parent — Dr Agarwal’s Health Care Ltd (AHCL). The sharp fall came as investors appeared to react negatively to the proposed share-swap arrangement.
By 1:15 p.m., AEHL shares were trading at Rs 4,476.35, down over 13 per cent from the previous close. With this move, the stock has now lost nearly 31 per cent year-to-date. Shares of AHCL, which made its market debut in February 2025, were also down by around 6 per cent, trading at Rs 430 per share.
Merger Details and Share Swap Ratio
The merger, which is subject to regulatory and shareholder approvals, will be executed via absorption. AHCL currently owns 71.90 per cent of AEHL, according to recent exchange data.
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Under the proposed arrangement, shareholders of AEHL (excluding AHCL) will receive 23 equity shares of AHCL (face value Rs 1 each) for every 2 equity shares of AEHL (face value Rs 10 each) held.
Why the Merger?
Dr Adil Agarwal, CEO of Dr Agarwal’s Health Care Ltd, called the move a strategic milestone in the group’s long-term vision.
“The merger is an important step in the Group’s journey and will help unlock the full potential of the combined businesses,” he said. “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.”
Market Sentiment Weak Despite Strategic Pitch
Despite the management’s optimistic tone, market participants appeared unconvinced, as both AEHL and AHCL stocks came under pressure. Expers believe the immediate reaction reflects uncertainty around the share-swap ratio and potential dilution concerns for minority shareholders.
