Apollo Hospitals Enterprises Ltd’s shares declined as much as 8 per cent in the early trade on Monday, the biggest loser on the Nifty 50 index. This is the biggest single-day fall in the stock since March 2020.
Though Apollo Hospitals declined by 8 per cent in the opening trade, its shares later recovered slightly and were trading lower by Rs 368.7 or 5.89 per cent Rs 5,890 apiece on the BSE at 10:30 am.
The decline comes after Apollo Hospitals’ announcement to raise Rs 2,475 crore or $300 million through private equity firm Advent for its unit Apollo HealthCo. It also proposes to merge Keimed, a promoter-owned wholesale pharma distribution business, in the next 30 months.
As per the agreement, Apollo HealthCo Ltd (Apollo 24/7 or ‘AHL’) would integrate 100 per cent of its wholesale pharmaceuticals distributor firm Keimed Pvt Ltd with Advent International over the next 24 to 30 months.
A joint entity would be formed in which Advent International would pick up 12.1 per cent stake. The combined entity would be valued at Rs 22,481 crore, as Apollo HealthCo is valued at Rs 14,478 crore and Keimed at Rs 8,003 crore. Post the merger, shareholders of Keimed Pvt Ltd would hold 25.7 per cent stake while Apollo Hospitals Enterprise Ltd would be the majority shareholder.
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