As part of this grand re-jig exercise, the Dr P C Reddy-founded Apollo Hospital group has decided to demerge the omni channel pharma (“OCP”) and digital health business – comprising the tele-health business of Apollo Hospital Enterprises Ltd. and its investment in Apollo Healthcare Ltd. – into a new entity through a composite scheme of arrangement.
Following the demerger, the scheme provides for the amalgamation of Apollo Healthcare Ltd. (AHL) with the proposed new company. Subsequently, Keimed Private Limited (“Keimed”), a leading wholesale pharmaceutical distributor, will be merged with the proposed new company.
The proposed transaction, the group claims, will result in the creation of the largest, integrated omni channel healthcare ecosystem with a FY25 revenue of Rs 16,300
crores in FY25.
The business then will comprise: (i) Apollo 24/7, the digital health platform;
(ii) Thee offline pharma distribution of AHL; (iii) Third party pharma distribution of Keimed; and (iv) tele-health services of AHEL.
The combination of businesses is anticipated to generate substantial synergies, and the new company is expected to achieve a revenue run rate of Rs 25,000 crore by FY27.
Direct access
The proposed structure will enable direct access of omni-channel pharmacy and digital health business to the shareholders of Apollo Hospital Enterprises Ltd. For every 100 shares of AHEL, the shareholders of AHEL will receive 195.2 shares of the new company, enabling their direct participation in the value unlock.
Once the scheme becomes fully effective,the new company will become Indian-owned and controlled. Once this happens, the new company will apply for a listing on the stock exchanges, said a release. The listing is expected within 18 to 21 months. Upon becoming an Indian-owned and controlled company, the new entity will consolidate the front-end pharmacy business by acquiring the remaining 74.5% stake in Apollo Medicals Pvt. Ltd. (AMPL), which owns 100% of APL. This will enable the new company to participate fully in the business economics of retail pharmacies. AHEL will retain15% stake in the new company to ensure an integrated, seamless and comprehensive healthcare offering across the patient lifecycle. AHEL will have one nominee director on the board of the new company.
New chapter
Prathap C Reddy, Chairman, Apollo Hospitals Group, said “Today’s developments mark the beginning of the next chapter of Apollo Hospitals’
relentless mission to bring healthcare of world-class standards within the reach of every individual. The omnichannel pharmacy business and integrated digital healthcare ecosystem will be a unique model to enable access to high-quality
healthcare for millions of Indians. What Apollo Hospitals achieved for the creation of the private healthcare industry in India, this new entity will create for the digitally forward generation of tomorrow. We have the opportunity to make a positive difference to their lives and partner in their wellness pursuits.”
