From legacy giants with decades of history, new-age corporate leaders, Indian firms are embracing demergers as a strategic move to unlock hidden value.
This growing trend reflects a shift toward sharper operational focus and streamlined business models. This can be achieved by separating non-core segments in independently listed institutions.
In 2025, several major groups announced strategic demergers to streamline operations, unlock the shareholder value, and focus on the main competencies.
And Apollo Hospital is one among them. Before diving into the details of the Demerger scheme, there is a brief observation of the company here.
About Apollo Hospitals
Apollo Hospitals, India’s first corporate hospital, is recognised as a leader in the private healthcare space in the country.
Over the years, it has evolved into India’s leading integrated healthcare services provider. It has a comprehensive presence across the healthcare ecosystem – hospitals, pharmacies, primary care, diagnostic clinics, as well as various retail health formats.
The company operates a total of 10,134 beds across 73 hospitals in India and overseas. Of these, 8,709 beds, in 45 hospitals, are owned by the company, 639 beds are in day surgery centres and cradles, and 790 beds are managed through operations and management contracts in 6 hospitals.
Here’s all you need to know about Apollo Hospital’s demerger…
#1 Demerger Approval
On 1 July 2025, the board of Apollo Hospitals Enterprise Ltd (AHEL) granted in-principle approval for a Composite Scheme of Arrangement, paving the way for the demerger of its pharmacy distribution and digital health verticals.
The scheme proposes the separation of Apollo HealthCo—housing the pharmacy distribution and digital platforms—into a newly formed listed entity.
#2 Demerger Plan
As per the scheme, AHEL will demerge its omnichannel pharmacy distribution and Apollo 24/7 digital health platform, currently under Apollo HealthCo, into a new company named Apollo Healthtech.
This entity will also include:
- Keimed, AHEL’s wholesale pharma distribution subsidiary
- Apollo’s telehealth services
- Apollo 24/7 and offline retail pharmacy operations
In addition, Apollo Healthtech will become an Indian Owned and Controlled Company (IOCC) and will apply for listing on Indian stock exchanges. AHEL will retain a 15% stake in the new company to ensure integration and continuity of the broader Apollo ecosystem.
The scheme also proposes that Apollo Healthtech will consolidate the front-end pharmacy business by acquiring the remaining 74.5% stake in Apollo Medicals (AMPL), which in turn owns 100% of APL.
#3 Demerger Ratio
As per the terms of the demerger, shareholders of AHEL will receive 195.2 shares of Apollo Healthtech for every 100 shares held in Apollo Hospitals Enterprise Ltd.
This share entitlement structure is designed to allow existing shareholders direct participation in the growth and value creation of Apollo Healthtech.
#4 Demerger Rationale
Apollo’s decision to demerge its pharmacy and digital health businesses is to unlock value and give each segment the space it needs to thrive independently. The move is designed to bring greater focus and flexibility to both the hospital and consumer health verticals.
Chairman Dr Prathap C. Reddy explained that the new entity will carry forward Apollo’s longstanding mission of making world-class healthcare accessible to all, especially the digitally savvy generation.
By separating the pharmacy and digital verticals, the company aims to build a customer-centric, omnichannel healthcare platform that can scale rapidly and serve a wider population base.
Managing Director Suneeta Reddy highlighted that this reorganisation will allow both businesses to pursue independent growth strategies.
With separate leadership, capital plans, and execution strategies, each arm can move faster and with more purpose—while still benefiting from the strength and trust of the Apollo name.
#5 Demerger Timeline
The demerger process, including regulatory and shareholder approvals, is expected to culminate in a stock exchange listing of Apollo Healthtech within 18 to 21 months. AHEL will declare a record date to determine eligible shareholders for the entitlement of Apollo Healthtech shares.
Upon completion, Apollo Healthtech shares will be listed on the NSE and BSE. The specific listing date will be announced in due course.
A Close Look at the Financials
For the March 2025 quarter, its consolidated revenues grew 13% YoY to Rs 55.9 bn, up from Rs 49.4 bn a year back.
Its net profit for the quarter jumped 54% YoY to Rs 3.9 bn, up from Rs 2.5 bn a year back, supported by healthy growth in revenues.
Inpatient (IP) volumes rose by 4% YoY in Q4FY25, despite the quarter still reflecting the lingering base impact from the decline in Bangladeshi patient inflows. This drop-off was triggered by a change in the Bangladesh government and subsequent revisions to visa application norms.
In FY25, the net profit rose 61% YoY to Rs 14.5 bn and revenue grew 14% YoY to Rs 217.9 bn.
Apollo Hospitals’ Financial Snapshot (FY20-24)
Over the past five years, Apollo Hospital’s revenue has grown at a compound annual growth rate (CAGR) of 14.7%, while its net profit has expanded at an impressive CAGR of 35.7%.
What Next?
Going forward, the new entity is projected to clock Rs 163 billion (bn) revenue for FY25 and is targeting a revenue of Rs 25 bn by FY27.
According to Shobana Kamineni, Executive Chairperson of Apollo HealthCo, the new entity, once fully integrated, is expected to become a truly customer-focused healthcare leader with capabilities spanning the entire value chain.
It will deliver medicines through more than 7,000 physical stores and an online platform covering over 19,000 pin codes, with Keimed ensuring supply chain integrity.
The aspiration is to serve over 100 million Indians with trusted quality and availability. Each business within the new entity is expected to register good growth rates.
Apollo Hospitals has also lined up an investment of around Rs 80 bn over the next five years, with plans to add more than 4,300 beds.
Apollo Hospitals’ Recent Share Price Performance
Over the past month, shares of Apollo Hospitals’ have gained 7.7%. In the past year, the stock has climbed 22%.
The stock touched its 52-week high of Rs 7,583 on 1 July 2025 and a 52-week low of Rs 6,002.2 on 28 February 2025.
Apollo Hospitals’ Share Price in 2025
Conclusion
Apollo Hospitals’ demerger marks a pivotal step in its strategy to unlock value and sharpen operational focus.
By carving out its high-growth pharmacy and digital health businesses into a separate listed entity, the company is creating two independent platforms, one anchored in traditional hospital services and the other in consumer-centric, tech-enabled healthcare delivery.
This move comes at a time when India’s healthcare sector is seeing strong structural tailwinds. With a growing population and rising demand for accessible, quality medical services, the industry is poised for long-term expansion.
Between 2022 and 2024, India’s healthcare and pharma sector witnessed 594 merger and acquisition (M&A) and private equity (PE) deals worth over US$ 30 bn, with hospitals emerging as a preferred investment destination, according to a joint report by Grant Thornton Bharat and the Association of Healthcare Providers of India (AHPI).
Investors should evaluate the company’s fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.
Happy Investing.
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