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Apollo Health & Lifestyle to raise $135 million from IFC

Funding to be used for capital expenditure and to open 1,100 new centers and cover for losses that will take place initially

T E Narasimhan  |  Chennai 

Budget may ease rules for offshore fund managers moving to India

Apollo Health and Lifestyle, part of Chennai-based Apollo Hospitals, is planning to raise $135 million from International Finance Corporation (IFC). This includes equity investment of around $68 million.

IFC is considering an equity investment of around $68 million, which includes around $34 million for its own account and around $34 million for IFC's Asset Management Company.

The proposed investment is an equity infusion of $38 million, alongside a reputable co-investor, is for funding expansion capex to open approximately 1,100 new centers and to cover the losses that will continue to accrue until the centers reach maturity. The project also includes the acquisition of Nova, India's leading ambulatory care provider, which was closed earlier this year.

The project is located in several cities throughout south and east India.

Apollo Health and Lifestyle Limited (AHLL) is expanding its network of smaller-format healthcare centers, including primary care clinics, diagnostics, short stay surgery centers, maternity centers, dialysis, and dental care.

As on June 30, 2015, AHLL directly owned Apollo Clinics (30 owned and 34 franchisee clinics) and diagnostics (four reference laboratories and 21 collection centers). In addition, the company has subsidiaries including Apollo Sugar Clinic Limited (ASCL) Centers focusing on Type 2 diabetic and pre diabetic patients. Currently, 25 centers either as advanced diabetic management center (ADMC) in-hospital, stand-alone and shop-in-shop (SIS i.e. located within a clinic).

Apollo Dialysis Private Limited (ADPL) operates dialysis centers and currently has four centers (two stand-alone, one SIS and one public-private-partnership center within a government hospital). Alliance Dental Care Limited (ADCL): currently 73 centers; either as stand-alone clinics or SPAs or express SIS located in a clinic or a hospital.

Apollo Specialty Hospitals Private Limited (ASHPL) - Cradle (women and children focused hospitals) and Spectra (ambulatory facilities focusing on minimal invasive/short stay surgeries) are operated under ASHPL.

Currently, the company has five own Cradle centers and three more Cradles will get operational (including a standalone in-vitro fertilization center) in second half of FY16. As regards Spectra, company has 10 centers across India which are mainly the centers acquired as a result of acquisition of Nova Specialty in 2015. One Cradle is operated under the franchisee model.

The company plans to grow the number of facilities under its control to approximately 1,300 by 2019.

Founded in 1979 by Dr. Prathap C Reddy, Apollo Hospitals has grown to become a leading healthcare provider with a national footprint and a wide range of services. In addition to owning and operating branded hospitals, Apollo owns and operates pharmacies, and provides consulting, telemedicine and healthcare education and training services.

Dr. Reddy and family members own 34.4% of the shares. Other significant shareholders include Integrated Healthcare Holdings (Mauritius) Ltd (10.9%), Massachusetts Mutual Life Insurance (8.7%), and Apax Group (5.1%).

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First Published: Fri, May 20 2016. 10:30 IST