The Hindu Business Line : Apollo plans hospitals in seven `mini metros'

Dr Pratap Reddy, Chairman, Apollo Hospitals Group, with Ms Suneeta Reddy, Director (Finance), at a press conference in Chennai on Monday. — Bijoy Ghosh

Chennai , July 25

APOLLO Hospitals group will utilise Rs 105 crore of the Rs 305 crore collected through its recent GDR issue, to put up 120-bed `First Med Hospitals' in seven mini-metros. Each hospital is expected to cost Rs 15 crore. `First Med' is Apollo's brand for its low cost, secondary care hospitals.

At a press conference here on Monday, Ms Suneeta Reddy, Director-Finance, Apollo Hospital Enterprises Ltd, said that IMRB had been mandated to come up with suggestions as to where to put up these hospitals.

Giving details of the proposed deployment of the GDR funds, Ms Reddy said that Apollo would set up two cardiac hospitals, at a cost of Rs 40 crore each. Another Rs 60 crore would be spent on improving the existing Apollo hospitals, she said.

The group also intends to expand its network of Apollo pharmacies across the country. Ms Reddy sees more retail space becoming available (once FDI is permitted in retailing).

The Chairman of the Apollo group, Dr Pratap Reddy, has announced a tie-up with Johns Hopkins Hospitals of USA. Under the tie-up, Johns Hopkins and Apollo will set up an Institute of Minimal Invasive Surgery' and a doctors' training institute in India.

The location of the Institute of Minimal Invasive Surgery is yet to be finalised. Dr Reddy said that Apollo would fund the land and building — the institute would require about one lakh sq. ft of built area plus space for vehicle parking. The $ 25 million (Rs 112 crore) required for equipping the institute with men and machines would be shared between the two partners.

Dr Reddy added that Apollo and Johns Hopkins would set up Central Reference Labs in India, where high-end testing would be done for both Apollo group and other hospitals in Asia.

Q1 net up 34 pc: Meanwhile, the company today announced its results for the first quarter of the current year.

Turnover increased 17 per cent to Rs 157.4 crore over the same quarter last year. Net profit increased 34 per cent to Rs 14 crore from Rs 10.5 crore previously.

Ms Reddy said that the proposed investment of $ 20 million into Apollo's equity by International Finance Corporation, Washington, would be done via the secondary market. She said that IFC could have invested in the company directly (perhaps by participating in the GDR) but its "timeline did not match".

Asked how Apollo would benefit if IFC buys the company's shares in the secondary market, she said that IFC's presence as a shareholder would be a big support to Apollo.

IFC's Web site, however, indicates providing funds to the company.

It says: "Subscription to Apollo's equity provides a platform for building a strong long-term relationship between IFC and the Apollo group."

It adds: "The proceeds will be used for a number of expansion opportunities, at various locations in India and abroad, as well as for general corporate purposes."

Clearly, IFC had intended to "subscribe to Apollo's equity". IFC's mention of any investment proposal on its Web site is always done ahead of the investment itself, "to enhance transparency."

If its "timeline did not match" with an opportunity to subscribe, the question is open whether it would invest in Apollo or not. Apollo officials did not want to comment on this.

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