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Healthcare major Apollo Hospitals has chalked out a ₹3,000 crore capex plan to add 2,000 new beds to its existing capacity in the next 3-4 years, according to senior officials of the company.
As of December 2022, Apollo Hospitals had 7,855 operating beds across the network (excluding Apollo Health & Lifestyle Ltd and managed beds), out of which, 14 were new hospitals with 2,384 operating beds.
Speaking to investors, the company’s Managing Director, Suneeta Reddy, said that over the next 24-month period, the company will add two brownfield hospitals in Bengaluru with a total bed capacity of 400.
Last year, the healthcare provider acquired a brownfield hospital in Chennai’s Old Mahabalipuram Road (OMR) and another hospital asset in Gurugram with a potential of 650 beds over 7-lakh square feet from Nayati Healthcare and Research NCR Private Limited, for a consideration of around ₹450 crore. Reddy said the Chennai and Gurugram brownfield properties will have 1,000 beds and will be ready by 2025.
Occupancy rate
She, however, added that the short-term challenge to improve the bed strength is the occupancy rate. As of December, occupancy at healthcare services (hospitals) stands at 65 per cent. Reddy said the target is to take it over 70 per cent.
A Krishnan, Group CFO, Apollo Hospitals, said the company has a clear roadmap to achieve its capex plans. He said the company has a free cash flow of ₹800 crore available for this and incremental debt, wherever required, can be availed of. “The expansion will be through both organic and inorganic routes.”
On the performance of Apollo Proton Centre in Chennai, Krishnan said, “This year, we are on track to get ₹50 crore in EBITDA and we expect it to double next year.”
Apollo 24/7 sale
On the stake sale proposal of its digital health platform (Apollo 24/7), Reddy said it is difficult to get the right valuation that the platform deserves in the current environment. “Apollo 24/7 is differentiated in many ways because it’s not just an online pharmacy but connects all of Apollo’s physical offerings.”
“We have enough capital to grow it for the next six months and by which time we are sure, we will have an investor there,” Reddy added.
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