Apollo Hospitals eyes JV with Walmart

With the government opening up the retail sector to FDI, health care major Apollo Hospitals is looking to form a JV with a foreign partner for their pharmacy business. Infact the management has confirmed to CNBC-TV18 that they are in talks with Walmart and other companies in US and Europe for a possible retail JV. CNBC-TV18's Swathi Narayanan reports.

Apollo is looking at forming a JV with retailers like Walmart for its pharmacy business. Currently, Apollo has over 1,300 pharmacies pan India and is looking to increase this to 2,000, over three years. Apart from Walmart, Apollo is also in talks with Walgreen, a drug retailing chain in the US and with another European company. Such a move, according to the management, will make Apollo's pharmacies more cost competitive Prathap Reddy, chairman, Apollo Hospitals says, “I am very clear then and now, we are not going to take a venture capitalist to put in, when we divest the pharmacies. We want to go with someone who will augment the business, some one like Walmart.” Apollo has also formulated an aggressive growth plan for its hospitals. They are on track to add about 1,500 beds this fiscal. The hospital network has over 8,000 beds currently. In the next two fiscals, the company is looking at adding 2,500 beds each year with an investment of about Rs 2,000 crore. The money for the expansion will be raised through debt. Reddy says “We have a comfortable debt/equity ratio. We can push a little more and take more debt. People are willing to give us. Earlier, we were planning a debt of 1:1. Today, we are able to service it at 1.5:1. As far as possible, we don't want to dilute.” And the story doesn't end there. Apollo is also looking to aggressively expand in tier-I and tier-III cities to fuel growth.