Apollo Hospitals has announced plans to demerge its omnichannel pharmacy distribution (OCP), Apollo 24|7 digital health platform, and remote telehealth division into a newly created listed entity (NewCo). The company will also merge its subsidiaries, Apollo HealthCo Ltd (AHL) and Keimed Pvt Ltd into NewCo to form a unified digital health and pharmacy platform.
This strategic realignment aims to unlock value, enhance operational focus, and establish India’s most comprehensive pharmacy and digital healthcare platform, the company told investors in a presentation on June 30.
The entire deal will happen in three steps. Apollo Hospitals will first separate its digital and pharmacy distribution businesses into a new company. Then, Apollo HealthCo will be merged into this new company. Finally, Keimed will also be merged into the new company. Shareholders of Apollo Hospitals will receive 195.2 shares of the new company for every 100 shares they currently hold in Apollo Hospitals.
The new company is expected to be listed on the stock exchanges within 18 to 21 months, once it receives all the required legal and regulatory approvals, Apollo Hospitals said in an exchange filing. Separately, Apollo HealthCo has agreed to buy the remaining 74.5% stake in Apollo Medicals, which means Apollo Pharmacies will become fully owned by the new company after the deal is complete.
According to Motilal Oswal Financial Services, after all the steps are completed, the total number of shares in the new company (including a 3% pool reserved for employee stock options) will be around 667 million shares, with each share having a face value of ₹2.
"It (the demerger) allows for a sharper strategic focus, with AHEL concentrating on core healthcare services, while NewCo drives growth in digital health and pharmacy distribution under dedicated leadership," the brokerage said in a note.
It added that the structure ensures efficient capital allocation and governance, with clear growth plans for both AHEL and NewCo as independent yet strategically aligned entities. AHEL will retain a 15–17.5% stake in NewCo and board representation, ensuring continuity and synergies through arm’s-length commercial arrangements.
Following the announcement, Apollo Hospitals' shares rose 3.48% to ₹7,495.00 on Tuesday.
The private hospital group said the new company is aiming to reach ₹25,000 crore in revenue and about 7% profit margin (before interest, tax, and depreciation) by the financial year 2027. This will be achieved by combining the scale of Keimed, which holds around 15% of India’s medicine distribution market, the strength of Apollo Pharmacies’ more than 6,600 physical stores, and the growing popularity of Apollo 24|7’s online services.
For the financial year 2025, the new company is expected to report ₹16,300 crore in revenue. It is also projected to earn ₹580 crore in earnings before interest, tax, and depreciation (EBITDA) and ₹220 crore in net profit—reflecting growth in the digital business and cost savings in its online healthcare services.
The deal helps remove the “holding company discount” that was applied to the pharmacy business, allowing the public to invest directly in it. It also improves transparency and makes it easier to compare the company’s performance with other digital and offline pharmacy businesses.
