Written by : Jayati Dubey
June 4, 2024
This initiative is part of AHEL's broader strategy to invest approximately INR 30 billion over the next three years, aiming to add 2,400 beds across various locations.
Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise (AHEL), has planned to open three new hospitals in Mumbai and Bengaluru.
This strategic expansion follows a recent INR 24.75 billion ($300 million) investment from private equity firm Advent International, as reported by Business Standard.
Reportedly, Apollo HealthCo is set to build two 500-bed hospitals in Mumbai with a total investment of around INR 20 billion. Additionally, a 400-500 bed facility is planned for Bengaluru.
This initiative is part of AHEL's broader strategy to invest approximately INR 30 billion over the next three years, aiming to add 2,400 beds across various locations.
Krishnan Akhileswaran, chief financial officer of AHEL, said, "In all urban locations, we are looking at 400 to 500-bed facilities. The investment in Mumbai will be around INR 20 million per bed, and we will be coming up with two 500-bed hospitals in Mumbai."
In a significant move to enhance its operations, Keimed, a wholesale distribution company owned by the Apollo Group promoters, will merge with Apollo HealthCo.
"The merger is going to take 24 to 30 months. Apollo 24x7 will also become neutral to profitable in the next six to eight quarters," Akhileswaran noted, referring to the company's pharmacy business.
With the addition of Keimed, Apollo HealthCo is projected to become an INR 250 billion business within three years, forming an integrated pharma distribution company.
AHEL has reported a substantial increase in its consolidated net profit, with INR 2.58 billion for the fourth quarter of the financial year 2023-2024, marking a 77% rise from the previous year's INR 1.46 billion.
"Revenue saw a 15% growth. We have achieved almost a 31% growth in EBITDA and a 77% increase in PAT [profit after tax], driven primarily by profitability in (Apollo) HealthCo and AHLL," Akhileswaran added.
Akhileswaran expressed optimism about HealthCo's trajectory toward profitability, particularly in the online segment, over the next six to eight quarters.
Echoing this forward-looking vision, Apollo Hospitals group chairman Prathap C Reddy said, "Going forward, Apollo Hospitals will continue to strengthen its endeavors to identify and introduce best-in-class, technology-enabled healthcare solutions to enhance patient outcomes and improve access to quality care."
The merger with Keimed and the focus on profitability in the online segment is expected to further solidify Apollo HealthCo's position in the market, driving growth and improving healthcare delivery in the country.
In a similar development, in February, Aster DM Healthcare, a leading provider of multispecialty healthcare services in India, outlined expansion plans, intending to add 1,500 beds over the next 2 to 3 years.
The company's CEO, Dr Nitish Shetty, talked about its expansion strategy, highlighting the allocated capital of around INR 850-900 Cr for this initiative. The expansion aims to enhance healthcare accessibility and cater to the growing demand for quality medical services.