Apollo Hospitals share price jumps over 4% 50 52-week high on plans to list digital health, pharmacy businesses

Apollo Hospitals share price rallied over 4% to hit 52-week high on Tuesday after the company’s board approved separate listing of its omnichannel pharmacy and digital health businesses within 18-21 months, as part of reorganisation exercise to unlock value. Apollo Hospitals shares jumped as much as 4.7% to a fresh high of ₹7,583.30 apiece on the BSE.

The board of directors of Apollo Hospitals Enterprise and Apollo HealthCo, a subsidiary of the healthcare major, have accorded in-principle 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 Ltd - into a new entity.

Following the demerger, the scheme provides for the amalgamation of Apollo HealthCo with the new entity.

This will subsequently be followed by the amalgamation of Keimed Pvt Ltd with NewCo (new entity).

“The proposed transaction will result in the creation of the largest, integrated omni-channel healthcare eco-system with a FY25 revenue of ₹16,300 crores ($1.9 billion) in FY25,” Apollo Hospitals said in a release.

The business will comprise - Apollo 24/7, the digital health platform; the offline pharma distribution of AHL; Third party pharma distribution of Keimed; and telehealth services of AHEL.

“The combination of businesses is anticipated to generate substantial synergies, and the New Co is expected to achieve a revenue run rate of ₹25,000 crores ($2.9 billion) by FY27,” the company added.

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.

For every 100 shares of Apollo Hospitals Enterprise, the shareholders of Apollo Hospitals Enterprise will receive 195.2 shares of NewCo, enabling their direct participation in the value unlock.

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), it said.

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

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

Apollo Hospitals share price has risen 9% in one month, and more than 12% in three months. The stock is up just 1% on a year-to-date (YTD) basis, but has rallied 22% in one year. Apollo Hospitals shares have delivered mutlibagger returns of 466% in the past five years.

At 10:15 AM, Apollo Hospitals share price was trading 3.28% higher at ₹7,480.00 apiece on the BSE.

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