Apollo Hospitals to adopt retail model to expand healthcare

The healthcare major Apollo Hospitals is planning to take retail model to expand offerings. The Chennai-based hospital chain said a detail strategy is being worked out. Besides, as part of the expansion of beds, the hospital is planning to invest Rs 1,650 crore.

While addressing the analysts on Sunday, Suneeta Reddy, joint managing director, Apollo Hospitals Enterprise Ltd, said, “Currently, we are working on formulating the strategy on how to take the healthcare through retail format, which includes shopping malls and setting up of dental clinics on leased basis.”

Before March 2012, the strategy will be ready, she said, while adding that the hospital chain will not look at any franchise model to expand Apollo Clinic. It may be noted, the hospital chain already into the retail space, through its pharmacy business, which turned around during the quarter ended December 31, 2011, by posting a Rs 2.2 crore Ebit profit as compared to loss of Rs 90 lakh a year ago. The hospital chain said it is waiting for a clear note on FDI policy to rope in a strategic partner in its pharmacy business, said K Padmanabhan, group president, Apollo Hospitals.

Commenting on the capex lined up, Krishnan Akhileswaran, chief financial officer, Apollo Hospitals Ltd, said total capex lined up was Rs 1,860 crore, of which Rs 225 crore was already invested. The proposed investments will take up the number of beds owned by Apollo to 8,500 by 2017 from the current 5,888 and number of owned hospitals to 49 from 37.

The chain has reported a drop in occupancy rate to 70 per cent from 73 per cent, this was due to addition in new beds. The average revenue per occupied bed in (Rs a day) was increased by 11.2 per cent to Rs 20,147 crore from Rs 18,125.

“We have cash in hand of around Rs 400 crore, which was raised through QIP and through promoter infusion and another Rs 1,000 crore will be funded through debt and internal accruals,” he said.

Suneeta Reddy ruled out any possibility of further dilution by Apollo.