Apollo Group, one of the largest healthcare groups in India, is looking to raise funds from Gulf and Middle East investors for expansion plans of its hospital chain. Apollo Hospitals has said that
it's slowing its expansion overseas and the focus is now on expanding in India, according to this report. This comes as the firm has dropped out from the race to buy Wockhardt Hospitals citing high valuations.
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In order to expand aggressively across India, Apollo is looking to reduce the costs the incurred by it when constructing a hospital. For this it's seeking a proposal whereby real estate investment trusts can separately own the hospital land and buildings, while it can focus on management of the property. It is also looking at reducing costs by leasing medical equipment.
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Apollo presently has 43 hospitals with a total of 8,000 beds, which it's looking to expand to 65 hospitals with 14,000 beds by 2014. The firms recently raised $50 million from International Finance Corporation (IFC), the private equity arm of World Bank. While it will receive $35 million as debt, the remaining $15 million will be in the form of convertible debentures. Private equity major Apax Partners, which invested Rs 426.40 crore in 2007, holds a little less than 14%
in the firm.
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Apollo was looking for overseas expansion but its efforts haven't been very successful. The firm ulled out of its project in Sri Lanka and a joint venture in Dubai. It recently set up an hospital in Mauritius which proved to be costly as Apollo had to import everything.
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Apollo also has a pharma retail chain, and healthcare outsourcing firm Apollo Health Street, which filed for an IPO last year before the market meltdown.
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Recently Apollo Hospitals was sent a notice by Enforcement Directorate (ED) on alleged diversion of funds. It has been asked to explain the end use of GDR issue made by the company during the year 2005.
