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Apollo draws up Rs. 1,446-crore investment plan

CHENNAI: Signalling its focus on healthcare and allied businesses, Apollo Hospitals Enterprise Ltd. (AHEL) is drawing up a Rs. 1,446-crore investment blueprint to add 2,164 more beds over the next two years.

AHEL will rely on a combination of equity and ECB (external commercial borrowing) to fund the investment. According to Suneeta Reddy, Executive Director (Finance) of the Apollo Hospitals Group, the equity component of the investment would be around Rs. 840 crore. Around Rs. 400 crore had already been raised. The promoters would chip in with a contribution of around Rs. 200 crore. The remaining portion of the equity component would come through internal accruals, she said. She said Apollo had now close to 10,000 beds across the country. Out of which, 1,000 beds were held through the joint ventures. The Executive Director said that henceforth (save for a few already initiated projects), Apollo itself would own all newly created beds. Ms. Suneeta Reddy said Apollo had come a long way since the days it depended on others for land to build hospitals. The company had now enough funds to address the land issue, she added.

Preetha Reddy, Managing Director, said Apollo would now focus on moving to Tier-II cities. Tiruchi, Karikudi and Nellore were among the places Apollo was keen to enter.

Mrs. Suneeta Reddy said Apollo was setting up three hospitals in Mumbai – one each in Thane, New Mumbai and Goregon. The first two would come in joint venture with Yash Birla and J.P. Morgan, respectively. The Goregon project was still to be concretised. Mrs. Suneeta Reddy indicated that Apollo would also be looking at adding 3,000 beds through inorganic growth. She said the healthcare delivery was proving to be very expensive. Also, smaller hospital would find it tough to follow stricter clinical protocols. All these factors provided acquisition opportunities for Apollo, she said.

AHEL reported an income of Rs. 1,150 crore for the year ended March 2008, a 28 per cent increase over the income of Rs. 899.50 crore in the previous year. The net profit after tax before extraordinary items stood at Rs. 101.80 crore, a 51 per cent increase over Rs. 67.60 crore previously.

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