Apollo to List New Omnichannel Pharmacy and Digital Health Company

With nearly $2 billion in yearly revenues, which is already a record for India's fragmented drug-retailing industry, Apollo Hospitals Enterprises (AHEL), the largest listed healthcare chain in the nation, and its subsidiary Apollo HealthCo have chosen to demerge their omnichannel pharmaceutical and digital health businesses (24x7 telehealth business) into a new company. Later on, the company will be mentioned independently.

 A scale of Rs 16,300 crore ($1.9 billion) in revenue in FY25 and announced aspirations to reach Rs 25,000 crore revenue by FY27, the composite scheme establishes a strong omnichannel pharmaceutical distribution and digital health platform leader in India, operating at an ebidta (or operating) margin of roughly 7%.

According to the agreement, following regulatory clearances, the new firm will be automatically listed in around 18 to 21 months, according to AEHL. 1,952 shares of the new business will be awarded to each AHEL shareholder. With a market valuation of over Rs 1.04 lakh crore, AEHL's shares fell roughly 1% on Monday to Rs 7,238 per on the NSE. Since the composite scheme plan also calls for the merger with Keimed, India's top whole sale pharmaceutical distribution arm of the flagship company, the move by the Dr. Prathap Reddy-led company will result in the creation of India's largest omnichannel pharmacy platform and distribution business.

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Apollo Hospitals announced on Monday that the new company will include telehealth services from AHEL, offline pharmaceutical distribution from AHL, third-party pharmaceutical distribution from Keimed, and the digital health platform Apollo 24/7. Significant synergies are expected to result from the merger of the companies. About 36.5% of the new business will be owned by the promoter family. According to a company statement, Apollo Hospitals plans to use strategic reorganization to unlock value and allow for the straight listing of its digital healthcare and omnichannel pharmacy businesses.