Promoter pledging in Apollo Hospitals may come down to 20-25%, says CFO

The promoter entity’s pledged shares in Apollo Hospitals Enterprise (AHEL) will come down to a manageable level.

It rose above 70 per cent a couple of quarters before, raising concerns in the market. At the end of September, the promoter group shareholding was 30.8 per cent, of which about 66 per cent was pledged, according to a regulatory filing “The Apollo Munich transaction (stake sale in it) is expected to fructify over the next one month — a final leg of regulatory clearances is awaited. Once that (happens), we hope to see the promoter pledge also come down to a manageable 20-25 per cent. That would be a comfortable number,” said A Krishnan, chief financial officer of AHEL. He was speaking after the announcement of the September quarter results.

Of the 51.2 per cent stake by Apollo Hospitals Group (and a few employees) in Apollo Munich Health Insurance to HDFC, for ~1,347 crore, the listed entity, AHEL, holds 9.96 per cent. The sale is expected to bring the listed entity ~261.5 crore in cash (subject to indemnity related and other contractually agreed deductions) and ~38.2 crore from Munich Health Holding AG as joint venture termination fee. The promoters recently sold five million shares through secondary placement to institutional investors, raising a little over ~700 crore to reduce the pledged shares. With this, the promoter shareholding fell from 34.4 per cent to 30.8 per cent.

The firm is also awaiting final regulatory approval for the hiving-off of the front-end of its pharmacy business. It expects to make that a separate entity by end-january.

Apollo Health and Lifestyle, its retail health care services business arm, achieved break-even on earnings before interest, tax, depreciation and amortisation during the quarter, as earlier expected.

Of the 51.2% stake by Apollo Hospitals Group in Apollo Munich Health Insurance to HDFC, for ~1,347 cr, the listed entity, AHEL, holds 9.96%