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Apollo Plans Increase in Clinics Across India

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 Apollo Health and Lifestyle Ltd (AHLL) plans to spend Rs. 250 crore over the next three to five years to drive a five-fold increase in the number of its branded healthcare clinics. AHLL is a unit of India’s largest hospital chain Apollo Hospitals Enterprise Ltd. AHLL plans to have 500 Apollo clinics in operation across India over the next three to five years from 90 now, AHLL marketing head Ravindra Pai said. It expects revenue to grow to Rs.500 crore in the same time, helped in part by the new clinics, he said. For the year ended March 2012, the company reported revenue of Rs.36 crore.

Out of the 90 clinics, 50 are owned by franchise partners. However, a majority of the new clinics planned will be owned by the company as it seeks to gain more control over the quality of healthcare, Pai said. The money for the new clinics will likely be raised through debt and profit of the Apollo group, he said. AHLL wants to expand mostly in the metros and bigger cities, and it will then look at smaller cities and towns, Pai said. The company faces two major challenges with this plan: prohibitive real estate costs in major cities, especially Mumbai; and a lack of skilled doctors and nurses in smaller cities.
Due to the high rent, the company may look at setting up clinics through joint ventures in cities such as Mumbai and it will also consider setting up smaller clinics. AHLL’s parent Apollo Hospitals Enterprise has been expanding into new businesses such as clinics and pharmacies as it looks to tap booming demand. India, the world’s second most populous country, is seen as an attractive market for healthcare services as a rise in disposable incomes and an increase in health insurance drives demand.

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