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HomeMarket NewsApollo Hospitals shares in focus after value unlocking exercise with NewCo
Shareholders of Apollo Hospitals Enterprise Ltd. will receive 195.2 shares of the new company for every 100 shares they hold. The listing of the new company is expected within 18-21 months.
By Ekta Batra July 1, 2025, 8:02:52 AM IST (Published)
Shares of Apollo Hospitals Enterprise Ltd. are in focus on Tuesday, July 1, as the company is creating a new listed entity by consolidating its pharmacy, digital health and pharma distribution businesses into one platform.
The hospital chain is doing this via a three-step composite scheme:
Demerger of its omni-channel pharmacy and digital health businesses —Apollo 24/7 and telehealth — into a new entity
Amalgamation of Apollo HealthCo with the new company
Merger of Keimed Pvt Ltd., India's largest wholesale pharma distributor, with the new company
The new entity will increase its stake in Apollo Pharmacies to 100% post arrangements. Apollo Pharmacies is the front-end pharmacy business of the company.
Apollo Hospitals Enterprise Ltd. will retain 15% stake in the new company to ensure strategic integration.
The business components in the new company will include:
Apollo 24/7: Digital health platform
Apollo Pharmacies: Retail chain
Keimed: Wholesale pharma distribution
Telehealth services of Apollo Hospitals
The combined entity will be a large omni-channel pharmacy and digital health platform in India. Its projected revenue for financial year 2026 is ₹16,300 crore and its target revenue for the next financial year is ₹25,000 crore with a 7% earnings before interest taxes depreciation and amortisation (EBITDA) margin.
Impact on Shareholders
Shareholders of Apollo Hospitals Enterprise Ltd. will receive 195.2 shares of the new company for every 100 shares they hold. The listing of the new company is expected within 18-21 months.
The demerger gives shareholders direct participation in the value of the pharmacy and digital business, eliminating the "holding company discount". The structure supports sharper capital allocation, management focus and value unlocking across business verticals.
Brokerage firm Morgan Stanley reiterated its "overweight" rating on Apollo Hospitals with a price target of ₹8,058. It said that if NewCo does manage to meet its targets, it will generate shareholder value. It also said that Apollo Hospitals is trading at a discount to its peers due to the 24X7 unit.
Citi also reiterated its "buy" rating on Apollo with a price target of ₹8,260. The brokerage said that with a separate listing and a lean business structure, it expects the holding company discount to narrow down.
Shares of Apollo Hospitals ended the previous session 0.96% lower at ₹7,238 apiece. The stock has gained 4.66% in the past month.
