Apollo Hospitals says the stalling of FDI in multi-brand retail will not affect its expansion plans in the pharmacy business.
There have been talks of Apollo Hospitals looking to shed stake in its pharmacy business for some time now. Hive-off plans have also been discussed. A couple of large pharmacy players in the developed markets of the US and the UK are said to have expressed interest in investing in Apollo's pharmacy chain.
To add more stores
Dr Prathap C. Reddy, Chairman, Apollo, said the delayed decision on multi-brand retail (pharmacy retail falls under this category) will not stop Apollo from expanding its pharmacy chain. “Apollo Pharmacy turned EBITDA positive this year. We will add a couple of 100 stores this year.”
Apollo has the finances to fund expansion on its own, said Dr Reddy.
The Union Cabinet in November cleared 51 per cent FDI in multi-brand.
This could have helped pharmacy retailers, rope in strategic investors. But following protests, the decision has been put on hold.
Growth prospects
Today, Apollo Pharmacy, with a turnover of Rs 700 crore, is said to be the largest chain in the country, with over 1,200 stores. The chain expects 25 per cent growth this year.
A capex of Rs 20 crore goes every year into expanding the pharmacy business.
On the hospitals front, Apollo aims to add 2,400 beds by 2013-14.
Apollo is investing over Rs 200 crore on a third hospital in Chennai. Land has been identified beyond Velachery – a suburban hub in South Chennai – for this 450-bed hospital.
Apollo also plans to set up a greenfield facility in Patna. It is also in talks with the Le Meridien group for obtaining land in Kochi to set up a 150-bed hospital.
Meanwhile, the group is talking to Malaysian sovereign fund Khazanah Nasional to see if there can be any synergies between the two companies, said Dr Reddy.
Khazanah has minority stake in Apollo. The company has acquired Parkway, which runs hospitals in Singapore. It has also bought out a large hospital chain in Turkey.