Shares of Apollo Hospitals rise 4 % to Rs 7,555 in state-of-the-art session on July 1 after the company said that its board accredited the separate listing of its omni-channel pharmacy and digital health businesses in 18–21 months.
The board of Apollo Hospitals and its subsidiary Apollo HealthCo has granted in-precept approval for a composite scheme of arrangement aimed toward reshaping its pharmacy and digital health industry.
Apollo Hospitals reconstructing plans increase shares price
Under the proposed scheme, Apollo will demerge its omni-channel pharmacy and digital health operations — which include its telehealth vertical and investment in Apollo HealthCo Ltd (AHL) — into a new entity (NewCo). It observed through the merger of AHL into NewCo.
Additionally, Keimed Pvt Ltd, one of India’s largest pharmaceutical wholesalers also integrated into the new entity, growing a massive-scale, end to end pharmacy distribution and digital healthcare platform. The new entity aims to record Rs 25,000 crore in sales by FY27.
Is it worthy to invest in stock?
Morgan Stanley has maintained a score with a target rate of Rs 8,058 per share, an upside potential of over 11%. The brokerage notes that Apollo presently trades at a reduction to key peers due to its 24/7 business. Under the proposed shape, Apollo Hospitals shareholders will obtain 195.2 shares of NewCo for every 100 shares held in Apollo Hospitals. The global brokerage believes that if NewCo meets its competitive revenue and EBITDA goals, it is able to release great shareholder value.
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