Nomura has maintained its neutral rating on Apollo Hospitals Enterprise (AHEL) with a target price of ₹6,856 after the company announced plans to acquire a 30.58% stake held by IFC in its subsidiary Apollo Health & Lifestyle (AHLL) for ₹1,254 crore. Post this transaction, AHLL will become a 100% subsidiary of AHEL, with 99.42% held by the parent and the remainder in an ESOP pool.
The brokerage said IFC’s exit comes after eight years, and full ownership of AHLL gives Apollo greater flexibility in capital allocation and scope for better operational synergies. It added that, similar to Apollo’s pharmacy business, the company may consider a separate listing of AHLL in the future, given the potential scale of the business.
Nomura said while the acquisition strengthens Apollo’s control and allows for sharper execution, it maintained a neutral view as valuations already factor in much of the growth story.
Disclaimer: The views and recommendations made in this article are those of Nomura. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
