Apollo Health plans to set up Diagnostics centres pan India

15% of the Rs 700 crore investment would be into setting up diagnostics chain

Apollo Health & Lifestyle Ltd (AHLL), a wholly-owned subsidiary of Apollo Hospitals Enterprise Ltd (AHEL), is planning to expand its presence of Apollo Diagnostics centres pan India in next three years, with 180 centres and 2,000 collection points.

The company has recently entered the segment and the expansion is part of AHLL's Rs 700 crore expansion plans. As reported earlier, the company is in talks with private equity players to raise Rs 500 crore out of this. According to reports, AHLL is looking to dilute around 20 per cent stake to raise the money.

"We are planning to invest around Rs 700 crore in AHLL in next few years and almost 15 per cent of that would be into Apollo Diagnostics," said Neeraj Garg, CEO, AHLL.

The company had no presence in the diagnostics chain business till this year, though it has been an attractive investment target for many others. It started launching diagnostic centres after April this year and currently has presence in six cities -- Chennai, Bengaluru, Hyderabad, Vijayawada, Karnool and Pune. At present, it has six laboratories and 50 collection centres.

"We are planning to go pan India with 180 labs and 2,000 collection centres in next three years," he added. The collection centres are standalone centres with around 150-200 sq ft to test blood and urine and will also have home collection system where the health worker would use only fresh sealed kits.

The collection centres are designed in a business-to-consumer (B2C) model in which the consumer can walk in for tests without any reference from a doctor. However, it would not have any imaging services. Initially the collection centres would be in metro cities and the top 100 tier I cities. These diagnostics centres might also be the feeding points for Apollo's larger format clinics speciality centres and hospitals.

The company is also open for acquirimg some of the small diagnostics labs to reach the target,he said. The growth would be both from margins and from voulme.

He said that AHLL currently has seven businesses including the Apollo Diagnostics, dental and dialysis business added into the entity recently.

The focus for investment in the Rs 700 crore investment plan is to build eight to nine more Apollo Cradle, the women and child care centres, adding to the nine existing centres, funding the existing cemtres of the day surgery format Apollo Spectra, which currently jas over 10 centres after the acquisition of Nova day surgery centres and expanding the number of clinics. The company is expected to double the nimber of clinics from the current 65, in next three years. Each Cradle would require an investment of Rs 20-25 crore in terms of capex.

The company posted a revenue of around Rs 200 crore last year and expects to reach around Rs 400 crore in the current fiscal year.

"During the last three years, we have experienced four-fold growth and in next three years, we are expecting another three- to four-fold growth," he added.