Apollo Hospitals to Invest Rs 3,000 Crore Following Advent International Deal

Apollo Hospitals Enterprise Limited (AHEL) has announced plans to invest approximately Rs 3,000 crore over the next three years, fueled by a recent strategic partnership with private equity firm Advent International. The deal is expected to significantly bolster Apollo HealthCo, a wholly-owned subsidiary of AHEL.

Under the agreement, Advent International will invest Rs 2,475 crore into Apollo HealthCo, with Rs 860 crore allocated for expanding Apollo HealthCo and Rs 890 crore directed back to AHEL. The investment will secure Advent a 12.1% stake in the merged entity, which includes the integration of Keimed, a distribution company owned by the Apollo Group promoters.

Krishnan Akhileswaran, CFO of AHEL, emphasized that the funding will facilitate both organic and inorganic growth for the hospital chain. “The Rs 890 crore returned to AHEL presents an opportunity for growth in our core markets,” Akhileswaran stated. He further highlighted that Apollo HealthCo aims to increase its bed count by 700 annually and is targeting a revenue of Rs 25,000 crore within three years, up from the current Rs 13,600 crore.

The merger with Keimed is poised to significantly enhance the group’s pharmacy network, increasing the number of pharmacies to 70,000. This move is expected to provide substantial value for Apollo shareholders, with the shareholding distribution adjusted to 59.7% for Apollo Hospitals and 25.7% for Keimed promoters.

Additionally, AHEL is planning a major project in Chennai, a 500-bedded Med City on Old Mahabalipuram Road, with an investment of Rs 950 crore. This facility will feature advanced clinical programs and is aimed at attracting international medical tourism.

As the pharmaceutical sector in India continues to grow at a rate of 12%, Apollo Hospitals aims to leverage its expanding pharmacy operations to achieve long-term growth rates of 20-25%.

The deal with Advent International marks a transformative phase for Apollo HealthCo, positioning it for significant expansion and enhanced market presence in the coming years.