Apollo Hospitals to spin-off omni channel pharmacy, digital health into new entity, plans listing

Apollo Hospitals to spin-off omni channel pharmacy, digital health into new entity, plans listing

Apollo Hospitals Enterprise Ltd. (AHEL) on Monday announced spin-off of its digital health, pharmacy distribution, and telehealth businesses into a new entity NewCo, with an aim to unlock value the by direct listing.

The composite scheme of arrangement announced by Apollo involves three key steps - amalgamation of Apollo HealthCo Ltd. (AHL), a subsidiary of AHEL, with NewCo.Merger of Keimed Pvt. Ltd., India’s leading wholesale pharma distributor, with NewCo.

The combined entity will have FY25 revenues of approximately ₹16,300 crore (US$1.9 billion), with ambitions to reach ₹25,000 crore (US$2.9 billion) by FY27, supported by a targeted EBITDA margin of 7%.

AHEL shareholders will receive 195.2 shares of NewCo for every 100 shares held, enabling direct participation in the high-growth digital health and pharmacy business.

The listing of NewCo is expected within 18–21 months, and the entity will be classified as an Indian Owned and Controlled Company (IOCC).

AHEL will retain a 15% stake in NewCo and appoint one nominee director to its board, ensuring strategic alignment across the healthcare continuum.

NewCo will consolidate Apollo’s front-end pharmacy business by acquiring the remaining 74.5% stake in Apollo Medicals Pvt. Ltd., which owns 100% of Apollo Pharmacies Ltd. This move will allow full participation in the economics of retail pharmacy.

Executives expect significant synergies across supply chain, customer engagement, and technology, with a projected customer base of over 100 million Indians.

Dr. Prathap C Reddy, Chairman of Apollo Hospitals Group, called the move “the beginning of the next chapter” in Apollo’s mission to democratize healthcare. Managing Director Suneeta Reddy emphasized the value unlock and elimination of holding company discount, while Shobana Kamineni, Executive Chairperson of AHL, highlighted the platform’s scale and reach, including 7,000+ stores and 19,000+ pincodes served.

Veda Corporate Advisors acted as exclusive financial advisors, with Shardul Amarchand Mangaldas as legal counsel. Valuations were conducted by KPMG and BDO, and Axis Capital provided the fairness opinion.