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Apollo Group has created a separate company called Apollo Pharmacies Ltd (APL), to give a big push to its expanding retail pharma business.
The new entity, structure and objectives open up options to raise funds through retail investors or IPO and firm up plans to tap the emerging opportunities, said Shobana Kamineni, Executive Vice-President of the Chennai-headquartered Apollo Hospitals Enterprises Ltd (AHEL).
With a turnover of Rs 4,300 crore and a pan India retail network of 3,187 stores in about 400 cities and towns spread across 20 states and four union territories, APL will strive to become a Rs 10,000-crore turnover company in the next 4-5 years, she told BusinessLine.
Apollo Hospitals Enterprises’ employee strength is over 21,000. “The progress is opening one store per day. The target is to open 5,000 retail outlets in the next 4-5 years. The strategy is to consolidate in South where we are strong, strengthen in the West and focus on the East and North,’’ Kamineni added.
“The new structure created by the board gives us the wherewithal to build value in the retail business and tap the big market opportunities unfolding in the pharma online business and be well prepared in the e-Commerce sector,’’ the first woman president of the CII added.
Apollo Hospitals Enterprises will make a slump sale transfer of its front end retail pharmacy business carried out through the standalone pharmacy segment to APL for Rs 527.8 crore, the company had said in a disclosure to the bourses on Wednesday after the board meeting.
The proposed reorganisation would not have an impact on the financials of AHEL as the backend business related to standalone pharmacies, which represents 85 per cent of business economics, will continue to be held by AHEL she said.
“Apollo Pharmacies is building strengths into its online business model and also into the private label segment. Indeed pharma online is difficult as Scheduled H drugs, prescription and regulatory issues pose big challenges, but the long experience and widespread network of the Group give us the advantage,’’ she said.
Asked if the company is looking for acquisitions to grow fast, Kamineni answered in the affirmative. Apollo Pharmacyl had acquired the strong brand of Hetero pharmacies a few years ago, which was pre-dominantly in Telangana and some major cities. The integration is completed.
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