International Finance Corporation plans to invest about $68 million (Rs 458 crore) via equity in Apollo Health and Lifestyle Ltd to help it expand its network of smaller-format healthcare centers.
The World Bank's private-sector investment arm said it will put in $34 million for its own account and an equal amount for IFC's Asset Management Company.
The Indian company plans to open 151 small-format healthcare centers, nine maternity facilities and 64 pathology labs, which will be supported by 765 collection centers, in several cities throughout south and east India. The total project cost is estimated to be about $135 million, IFC said in a disclosure.
Smaller-format healthcare centres is still a relatively small sector in India and many other emerging markets, IFC said, adding that its investment will show other potential investors how such models can succeed in emerging markets.
Apollo Health is a unit of Apollo Hospitals Enterprise Ltd. Mumbai-listed Apollo Hospitals, founded in 1979 by Dr Prathap C Reddy, is India's largest hospital chain. It also operates pharmacies and provides consulting, telemedicine and healthcare education and training services.
Reddy and family members own 34.4% of the hospital chain. Other significant shareholders include Integrated Healthcare Holdings (Mauritius) Ltd (10.9%), Massachusetts Mutual Life Insurance (8.7%), and Apax Group (5.1%).
IFC makes both debt- and equity-style investments in India across sectors. In the healthcare sector, it has invested in Apollo rival Fortis Healthcare Ltd and Max Hospitals. It has previously also invested in eye-care firm Eye-Q Vision, dialysis chain NephroPlus, home healthcare firm Portea and diagnostics chain SRL.
In March this year, IFC came in as an anchor investor in Bangalore-based oncology chain HealthCare Global Enterprises Ltd. In April, it said it planned to invest Rs 61.5 crore ($9.45 million) in Kanpur-based healthcare services provider Regency Hospital Ltd.
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