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Prabhudas Lilladher Report
Apollo Hospitals Enterprise Ltd.'s 100% subsidiary “Apollo HealthCo” has entered into agreement to raise equity capital of Rs 24.75 billion ($300 million) from Advent International (Advent) for 16.8% stake.
In addition, Apollo HealthCo has also proposed integration of promoter group entity Keimed Pvt. Ltd. (Keimed) into Apollo HealthCo in phased manner.
This will create leading integrated pharmacy distribution business complemented by fast growing omnichannel digital health business.
While stake sale of Apollo HealthCo to Advent was done below our estimates by $0.8- 0.9 billion; likely merger of Keimed with Apollo HealthCo is a positive step and removes overhang of any leakage.
Further management guidance of Rs 17.5-20 billion Ebitda of merged entity by FY27 provides comfort.
Maintain Buy rating with target price of Rs 7,050/share.
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