Apollo plans Rs 270 crore expansion

As part of its expansion to tier II and III cites, Apollo Hospitals, is planning to increase the number of beds to 725 in the next three years, under Apollo Reach. The company is planning to invest around Rs 270 crore, according to a senior official from Apollo Hospitals.

The company’s pipeline of new Reach hospitals include around four hospitals with 100-200 beds in Nashik, Nellore, Trichy and Ayanambakkam, a place in the suburbs of Chennai. It has around 600 beds already operational through five small hospitals in tier II cities.

The initiative is part of the company’s plans to penetrate the tier II cities with standardised health care service delivery. The investment of Rs 270 crore would be from a mix of internal accruals and debt, said the official on condition of anonymity.

It has initiated construction works for a 150-200 bed hospital in Nellore district, in Andhra Pradesh through a subsidiary, Pinakini Hospitals Ltd. The hospital, with a project cost of around Rs 65 crore, would be ready for operation in next two years.

At present, Apollo Hospitals runs hospitals in tier II cities including Kakin-ada, Karaikudi, Karimna-gar, Bhubaneswar and Karur under the Reach initiative, according to the company’s annual report.

The proposed addition of 725 beds under the Reach initiative is part of its target to add 2,400 beds to the existing bed capacity spread over 54 hospitals, by March 2014.

The group has around 8,700 beds across 54 hospitals, 62 clinics and a chain of Apollo Pharmacies. The company has reported revenues of around Rs 1,929.5 crore from hospitals business compared to around Rs 1,551.1 crore during the previous fiscal.