Shares of Apollo Hospitals Enterprises Ltd shot up more than 4% on 1 July after the company announced that its board approved the separate listing of its omni-channel pharmacy and digital health businesses within 18-21 months, as part of a larger reorganisation to unlock value.  

The board of Apollo Hospitals and its subsidiary Apollo HealthCo has given preliminary approval for a composite plan of arrangement intended to reorganise the company’s pharmacy and digital health businesses.

Under the proposed plan, Apollo will spin off its omnichannel pharmacy and digital health activities, including its telehealth vertical and investment in Apollo HealthCo Ltd (AHL), into a new organisation (NewCo). This will be followed by the merging of AHL and NewCo.  

Furthermore, Keimed Pvt Ltd, one of India’s major pharmaceutical wholesalers, would be incorporated into the new company, resulting in a large-scale, end-to-end pharmacy distribution and digital healthcare platform. The new business expects to generate Rs 25,000 crore in revenue by FY27.

Apollo stated that NewCo will be classed as an Indian Owned and Controlled Company (IOCC) and expects to be listed on Indian stock exchanges within 18-21 months, subject to regulatory approvals.  As part of the proposal, NewCo will purchase the remaining 74.5% ownership in Apollo Medicals Pvt Ltd (AMPL), which owns 100% of Apollo Pharmacies Ltd (APL), consolidating control of its front-end pharmacy operations.

Following the restructuring, Apollo Hospitals Enterprise Ltd (AHEL) will retain a 15% interest in NewCo to enable seamless integration throughout the patient journey and healthcare continuum.  

Dr. Prathap C. Reddy, Chairman of Apollo Hospitals Group, commented on the development, saying the new structure will provide millions of Indians with high-quality healthcare through a unique omnichannel strategy. Suneeta Reddy, Managing Director, stated that shareholders would profit from direct ownership of what will become India’s largest pharmacy and digital healthcare platform.

According to Shobana Kamineni, Executive Chairperson of Apollo HealthCo, the integration would create a customer-focused healthcare company capable of supplying pharmaceuticals through over 7,000 physical locations and an online platform covering 19,000 pincodes.

At 3:30 pm, the shares of Apollo Hospitals closed 3.63% higher at Rs 7,505 on NSE.

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