Mumbai: Apollo Hospitals Enterprises (AHEL), the country’s largest listed healthcare chain, and its subsidiary Apollo HealthCo have decided to demerge their omnichannel pharma and digital health businesses (24×7 telehealth business) into a new entity that garners nearly $2 billion in annual revenues – already a record for India’s fragmented drug-retailing industry. The business will be separately listed later.
The composite scheme creates a formidable omnichannel pharmacy distribution and digital health platform leader in India, with scale of Rs 16,300 crore ($1.9b illion) of revenue in FY25, with stated plans to achieve Rs 25,000 crore revenue by FY27, on an ebidta – or operating – margin of about 7%.
By the arrangement, the new entity will get automatically listed in about 18 to 21 months, after regulatory approvals, AEHL said. Each shareholder of AHEL will be entitled to 1,952 shares of the new company.
AEHL shares, with a market capitalisation of about Rs 1.04 lakh crore, slid about a percentage point Monday on the NSE to Rs 7,238 apiece.
The move by Dr Prathap Reddy-led company will create India’s largest omnichannel pharmacy platform and distribution business as the plan of the composite scheme also provides for the amalgamation of Keimed, India’s leading wholesale pharma distribution arm of the flagship company.
Apollo Hospitals said Monday the new business will comprise Apollo 24/7, the digital health platform, the offline pharma distribution of AHL, the third-party pharma distribution of Keimed, and telehealth services of AHEL.
The combination of businesses is anticipated to generate substantial synergies.
The promoter family holding in the new company will be approximately 36.5%. A statement from the company said that Apollo Hospitals proposes to unlock value through strategic re-organisation, enabling direct listing of its omnichannel pharmacy and digital health business.
Shobana Kamineni, who is the chairperson of Apollo HealthCo, will be the executive chairperson of the new entity. The promoter family will be represented on the board of directors.
“The NewCo will focus on deepening customer penetration and experience through an integrated healthcare platform and enabling cross synergies between AHL and NewCo,” according to sources aware of the development. “Looking ahead, this presents a significant opportunity for the group, with a potential customer funnel of over 100 million individuals into the Apollo healthcare universe,” the statement noted.
