Apollo rejig could spur re-rating

Expansion gains Apollo Hospitals' standalone hospital business is likely to see its growth accelerate with more beds.

- Manish Joshi

Apollo Hospitals Enterprise Ltd has decided to give its existing shareholders direct ownership of its subsidiary, Apollo Healthco Ltd. The new business will have online, offline, retail and wholesale pharmacy segments under one umbrella, apart from the digital consultation and treatment business of Apollo 24/7.

Apollo Healthco will have nearly 667 million equity shares with a face value of ₹2 each.

Apollo Hospitals' shareholders will receive 195.2 shares of Apollo Healthco for every 100 shares they hold. Apollo Healthco's listing is likely in 18-21 months. The exercise would mean that Apollo Hospitals would only have a 17.5% stake (direct plus indirect through its other subsidiaries) in Apollo Healthco against the earlier plan of owing 59.2%.

The two separate listed entities with dedicated leadership will allow the management teams to sharpen their focus on hospital and pharmacy businesses separately. Following the announcement, Apollo Hospitals shares touched a new 52-week high of ₹7,584.50 apiece on Tuesday.