Apollo Hospital's Asset Sale or Outside Investment?

Reddy family who controls India’s largest private hospital chain, Apollo Hospital Enterprise Ltd. (AHEL) is looking for investors to pay their debt. They are also considering the option to sell out some of the assets. The Reddy family currently owns about 34% of Apollo’s stock.

Apollo’s managing director, Suneeta Reddy in a recent interview said, “The idea is to do something that’s good for all shareholders of Apollo. If it means reducing our pledge, we are committed to doing that. We will see what the family can do.”

In February, the credit crunch across India’s financial sector raised fears of many shareholders defaulting. Apollo also saw a drop in its share price during this time. However, since then Apollo’s stocks have recovered.

Suneeta further added that the family is targeting to bring down the pledge ratio of its Apollo holding to 20% in the next one year. After selling its share in health insurance venture with Munich Re Group, its pledge ratio reduced significantly. She also told a deal to further raise money might be signed this month, but didn’t give specific details.