The transaction will be carried out in two phases and will reduce Apollo Hospitals’ holding in Apollo Healthco from 94.91% to 78.87%. Credit: sdx15 / Shutterstock.

Apollo Hospitals Enterprise has agreed to sell a 16.9% stake in its subsidiary, Apollo Healthco, to Rasmeli for Rs24.75bn ($295m).

The transaction will be carried out in two phases and reduce Apollo Hospitals’ holding in Apollo Healthco from 94.91% to 78.87%.

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In the first tranche, Rasmeli will take over Class B Compulsorily Convertible Preference Shares (CCPSs) worth Rs2.47bn.

The second tranche will involve a payment of Rs7.42bn following the acquisition of Class B CCPSs, which is valued at Rs9.9bn.

In addition, Rasmeli will purchase Class A CCPSs worth Rs14.85bn.

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The deal also comprises Apollo Healthco’s purchase of an 11.2% stake in Keimed from Apollo Hospitals’ promoter, Shobana Kamineni, for Rs6.25bn.

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This will be followed by a Rs999.9m investment in Keimed, which will then be amalgamated with Apollo Healthco.

The deal’s completion is contingent on the terms set in the investment agreement, with the final tranche to be decided by the board of Apollo Healthco.

Last month, Apollo Hospitals reported a significant increase in its consolidated profit after tax, which increased by more than 83% to Rs3.05bn for the first quarter of the fiscal year 2025 (FY25).

This performance was driven by strong results across its various verticals, with the company reporting Rs1.666bn for the same quarter of last year.

Apollo Hospitals’ revenue also increased by more than 15% to Rs50.86bn in the first quarter of FY25, compared with Rs44.178bn a year earlier.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose by more than 32% to Rs6.75bn, with the margin also improving by 180 basis points to 13.3% during the quarter.

Earlier this year, Apollo Hospitals acquired a stake in its subsidiary, Apollo Health and Lifestyle (AHLL), for Rs1.03bn.

The company bought 3.5 million of AHLL’s equity shares for Rs294 each in an effort to allow its own shareholders to buy additional shares at a discounted rate.