Apollo Hospitals Enterprise Limited (AHEL) late on Monday announced plans to list its omnichannel pharmacy and digital health business in the next 18-21 months as part of a strategic reorganization.
The company’s board of directors has approved the demerger of its omnichannel pharma and digital health business, Apollo HealthCo, into a new entity—NewCo—through a composite scheme of arrangement. Following the demerger, Keimed, the wholesale pharmaceutical distributor that Apollo acquired last year, will be amalgamated with NewCo.
Apollo Hospitals shareholders will have direct shareholding in the combined entity. For every 100 shares of AHEL, shareholders will receive 195.2 shares of the new entity, the company said.
Integrated ecosystem
The proposed transaction will result in the creation of the largest, integrated omnichannel healthcare ecosystem with a FY25 revenue of ₹16,300 crore ($1.9 billion) in FY25, the company said.
The new business, comprising Apollo 24/7, the digital health platform, the offline pharma distribution business, Keimed, and telehealth services, is expected to achieve a revenue run rate of ₹25,000 crores ($2.9 billion) by FY27.
In an interview with Mint last week, Shobana Kamineni, executive chairperson of Apollo HealthCo, said that the entity is expected to hit a ₹30,000 crore valuation in the next five to six years, as it grows exponentially.
The listing is expected within 18 to 21 months. NewCo will become an Indian owned and controlled company (IOCC) once the scheme is put into effect. NewCo plans to consolidate the front-end pharmacy business by acquiring the remaining 74.5% stake in Apollo Medicals Pvt. Ltd (AMPL), which owns 100% of Apollo HealthCo. This will enable the NewCo to participate fully in the business economics of retail pharmacies, the company said.
AHEL will retain 15% stake in NewCo and will have one nominee director on the Board of NewCo.
