INDIA—Private equity firm Advent International has announced plans to invest 24.75 billion rupees (US$297 million) in Apollo Hospitals’ Apollo HealthCo unit and merge its online pharmacy business with pharmacy distributor Keimed.

Advent will inject the funds in compulsory convertible instruments over two tranches, securing a 12.1% stake in the merged pharmacy business entity, which will boast an enterprise value of 224.81 billion rupees.

According to Dhara Patwa, an analyst at SMIFS Institutional Research, this valuation surpasses that of peers such as MedPlus Health, highlighting the market’s recognition of the combined entity’s value and growth potential.

Apollo HealthCo, the digital health and services arm of Apollo Hospitals, has been straining the hospital operator’s finances due to the cash-draining nature of its pharmacy business, Apollo 24/7.

In February, Apollo HealthCo recorded a loss for the sixth consecutive quarter. Nonetheless, the hospital operator has expressed optimism about turning the unit profitable by the end of fiscal 2024.

Patwa went on to note that Advent’s infusion and the integration of Keimed have created a combined entity poised to lead the country’s retail health sector.

According to Apollo Hospitals, Apollo HealthCo has an enterprise value of 144.78 billion rupees (US$1.735 billion), while Keimed has a value of 80.03 billion rupees (US$959.5 million)

Apollo Hospitals Managing Director Suneeta Reddy disclosed that the merged entity anticipates generating revenue totalling 250 billion rupees (US$2.997 billion) over the next three years. 

Under the arrangement, Apollo Hospitals will retain a 59.2% stake in the combined entity, with Keimed holding 25.7%. 

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