Apollo Hospitals shares hit 52-week high on reorganisation plans; check full details

Shares of Apollo Hospitals soared 4.72% to an intraday high of ₹7,584.50 apiece on Tuesday, July 1, after its board approved a separate listing of its omnichannel pharmacy and digital health businesses within 18-21 months.

It will be as part of a reorganisation exercise to unlock value.

Last seen, the stock was trading at ₹7,502 apiece on the National Stock Exchange (NSE), surging 3.59%. It had touched a 52-week high of ₹7,584.50 during the intraday period on Tuesday.

In the last five trading sessions, the stock has gained almost 7%. Over a year’s period, Apollo Hospitals shares have climbed 21.4%.

The company’s market capitalisation stands at ₹1.07 lakh crore.

1. The board of directors of Apollo Hospitals and Apollo HealthCo, a subsidiary of the healthcare major, have accorded in-principal approval for the composite scheme of arrangement.

The scheme entails the demerger of the Omni Channel Pharma and Digital Health business—comprising the telehealth business of Apollo and its investment in Apollo HealthCo Limited (AHL)—into a new entity.

2. Following the demerger, the scheme provides for the amalgamation of AHL with the new entity. Keimed Pvt Ltd, India's leading wholesale pharmaceutical distributor, will subsequently amalgamate with the new entity, NewCo.

3. The scheme creates a formidable omnichannel pharmacy distribution and digital health platform leader in India, with stated plans to achieve ₹25,000 crore revenue by FY27, Apollo Hospitals Enterprise said in a regulatory filing.

4. Upon the effectiveness of the scheme, the new entity will become an Indian Owned and Controlled Company (IOCC) and will apply for listing on the stock exchanges, it added. The listing is expected within 18-21 months, the healthcare major said.

5. Upon becoming an IOCC, the entity also proposes 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 Pharmacies Limited (APL).

Apollo Hospitals Enterprise Ltd (AHEL) will retain a 15% stake in the 'NewCo' to ensure an integrated, seamless, and comprehensive healthcare offering across the patient lifecycle, it added.

What the management said…

“The omnichannel pharmacy business and integrated digital healthcare ecosystem will be a unique model to enable access to high-quality healthcare for millions of Indians,” Apollo Hospitals Group Chairman Prathap C. Reddy said.

Apollo Hospitals Enterprise MD Suneeta Reddy said the proposal enables the healthcare provider's shareholders to gain direct shareholding in the country's largest omni-channel pharmacy and digital health platform.

“The new entity, once integrated, will be a truly customer-focused healthcare leader, with capabilities across the value chain. Delivering medicines seamlessly from 7000+ physical stores and an online delivery platform serving over 19,000 pincode, with Keimed ensuring supply chain integrity, our aspiration is that we will serve over 100 million Indians,” Apollo HealthCo Executive Chairperson Shobana Kamineni said.