Apollo HealthCo Announces Expansion With New Hospitals In Mumbai & Bengaluru

After a recent deal with private equity firm Advent International, Apollo HealthCo, a subsidiary of Apollo Hospitals Enterprise (AHEL), is set to open three new hospitals in Mumbai and Bengaluru. The expansion will include two hospitals in Mumbai, each with 500 beds, and another in Bengaluru with 400-500 beds. The investment in these projects is expected to total around Rs 2,000 crore.

Advent International agreed to invest Rs 2,475 crore in Apollo HealthCo in April. AHEL received Rs 890 crore from this deal, which will be used for organic and inorganic expansion. This move aligns with AHEL's long-term strategy to invest approximately Rs 3,000 crore over the next three years to add 2,400 beds across urban locations.

Krishnan Akhileswaran, CFO of AHEL, detailed the investment plans stating, "In all urban locations, we are looking at 400- to 500-bed facilities. The investment in Mumbai will be around Rs 2 crore per bed, and we will be coming up with two 500-bed hospitals in Mumbai."

Additionally, Keimed, a wholesale distribution company owned by the Apollo Group's promoters, will merge with Apollo HealthCo. Akhileswaran stated, "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. When that happens, HealthCo itself will be a large business. With the addition of Keimed, we are talking about a Rs 25,000 crore business, which should be an integrated pharma distribution company in three years."

AHEL reported a consolidated net profit of Rs 258 crore for the fourth quarter of the financial year 2023-24, a 77 per cent increase from Rs 146 crore in the same quarter last year. Akhileswaran highlighted the company's performance: "Overall, the business has done well. Revenue saw a 15 per cent growth. We have achieved almost a 31 percent growth in EBITDA and a 77 percent increase in PAT (profit after tax), driven primarily by profitability in Apollo HealthCo and AHLL. HealthCo has turned around from losses to an overall profit situation, and the overall profit of AHLL has also improved, while healthcare has continued to maintain its momentum."

Prathap C. Reddy, chairman of Apollo Hospitals Group, emphasised the company's future direction: "Going forward, Apollo Hospitals will continue to strengthen its endeavours to identify and introduce best-in-class, technology-enabled healthcare solutions to enhance patient outcomes and improve access to quality care. Together, we embark on a journey towards a healthier, more resilient future, where every individual receives the highest standard of care."

(With inputs from media reports)