Apollo Hospitals plans to sell 49% in pharma chain unit

Apollo Hospitals, the country’s largest private healthcare provider, is planning to divest 49 per cent stake in its pharmacy chain division to generate growth funds before hiving it off into a separate company.

The company would also explore the option of listing the unit, Suneeta Reddy, executive director (finance), Apollo Hospitals, told reporters on the sidelines of a Confederation of Indian Industry-organised health summit here today.

The standalone pharmacy business of Apollo turned Ebitda (earnings before interest, taxes, depreciation, and amortization) positive during the second quarter of this financial year.

Revenues from the pharmacy business grew almost 40 per cent to Rs 166.3 crore during the September quarter, compared to Rs 118.9 crore in the year-ago period. The company added 44 standalone pharmacies during this period to take its total strength to 1,110.

The Apollo management has been of the view that the business should take its own growth chart after it acquires a critical mass.

The company has identified increased self-branded and generic product sales and distribution of pharmaceutical supplies to bulk consumers like hospitals, nursing homes, etc, as the growth strategies for its pharmacy division.

For the September quarter, consolidated revenues of Apollo Hospitals Enterprise stood at Rs 672 crore, compared to Rs 516.9 crore during the comparable quarter in 2010, up by 30 per cent.

Reddy also said the company was planning to raise Rs 550 crore via equity and debt for expansion by March.

Talks with Khazanah for medical education
Meanwhile, Sangita Reddy, executive director (operations) of Apollo, said her company was in talks with Malaysian sovereign fund Khazanah for healthcare education in the country.

“There is an urgent need for opening medical colleges to increase the number of doctors in the country. We are also tying up with best universities for technical support,” she added.

Khazanah holds nearly 12 per cent stake in Apollo.

The company is already running eight nursing schools, four nursing colleges under the aegis of Apollo Hospitals Education and Research Foundation.

Reddy further said Apollo was also planning to open 50 clinical centres in the next phase of expansion, 25 of which would be for preventive healthcare and screening.

Apollo Hospitals’ shares today closed 4.72 per cent higher at Rs 508.1 on the Bombay Stock Exchange.