Apollo Hospitals scouting for acquisitions in north and east India
After acquiring IHH Healthcare (IHH's) stake in Apollo Gleneagles Hospital Limited, Kolkata (AGHL), Chennai-based Apollo Hospitals is now scouting for some more acquisitions to expand in north and east India. The hospital chain recently got its board's approval to raise upto Rs 1,500 crore and a portion of it will be used for acquisitions.
Suneeta Reddy, Managing Director, Apollo Hospitals Group said that while they may not look for greenfield projects for the time being, they are looking at a few small ticket acquisitions -- around 300-beds in larger cities and 200 beds in smaller ones -- to expand Apollo's presence mainly in northern and eastern parts of the country.
Recently, Apollo signed a definitive share purchase agreement with IHH, its JV partner in Apollo Gleneagles Hospital Limited, Kolkata (AGHL) to acquire its existing 50 per cent stake in AGHL for a cash purchase consideration of Rs 410 crore
She added, the proposed QIP will fund proposed acquisitions, for investment in 24/7 digital app and to reduce debt to enhance profitability.
Apollo got its board's approval to raise upto Rs 1,500 crore by way of a further issue of securities on a preferential basis and/or through Qualified Institutional Placement (QIP).
Commenting on occupancy, Krishnan Akhileswaran, Group CFO of Apollo Hospitals said in November it increased to 70 per cent, from 65 per cent in October and 38 per cent in the first quarter. He noted, break even is around 50 per cent. Covid-19 occupancy is 30 per cent of total occupancy.
On pharmacy, he said, 80 per cent EBIDTA will be captured by back end Apollo and in the listed entity, once initial costs are absorbed in the back end, can capture up to 85% of EBDITA of the pharmacy business.