The existing private equity partners of Apollo Hospitals, such as Apax Partners, Bisikan Bayu Investments (Mauritius), an investment arm of Khazanah, and Clsa (Mauritius), are likely to pick up stakes in Apollo Pharmacy, the retail pharmacy business of Apollo Hospitals, as the parent is seriously looking at hiving it off into a separate entity.
Similarly, Apollo Hospitals would also look for partners for its nursing training business, Apollo School of Nursing, to unlock the value of each business entity of the group, sources close to the development said.
Apollo Hospitals, which has been scouting for investors over the last few years for its retail pharmacy business, is expected to get strong support from the existing PEs, as a sizeable chunk of the 1,050 stores showed encouraging Ebitda margins during the last financial year. The rest of the outlets are expected to follow suit in coming months, sources pointed out.
The stores had an Ebitda margin of 3.5% in FY10 as against 0.47% in FY09. More importantly, the Ebitda margins for the same batch of stores in the last quarter of FY10 substantially improved to 5.15%, sources said. They further said that the retail pharmacy business of Apollo Hospitals reported a turnover of Rs 1,000 crore for the previous financial year. The revenue for all the standalone pharmacies grew by 44.8%, from Rs 333.80 crore in FY09 to Rs 483.60 crore in FY10.
Further, the standalone pharmacies (mature stores+new stores) achieved break even at the Ebitda level in the last quarter of the previous fiscal.
When contacted, a senior official of the company said: “We have kept our options open to bring in existing as well as new partners; but it is too early to decide on the same. We are happy that the stores are becoming Ebitda positive after a few years. We need to consolidate our business first before we bring in partners.”
To another question, the official said: “We are looking at strategic collaborations for our nursing training business, Apollo School of Nursing. More than 700 students have graduated from 13 colleges across the country and hundreds more are undergoing training. Most of them will be absorbed for our captive purpose and we have various options for this business.”
The Apollo School of Nursing offers various courses and trains nurses who serve in hospitals across India and abroad. The group has also introduced courses to train students in its College of Physiotherapy. They are taught the skills and techniques of therapeutic massage and exercise for the management of various medical and surgical conditions.
Source: Financial Express