The Hindu Business Line : Apollo Hospitals prefers controlling stake in joint ventures

The bitter experience suffered in Sri Lanka last week has compelled the Indian healthcare giant Apollo Hospitals Group to revise its strategy on joint ventures not just overseas but within the country as well.

The Group is now planning to preferably go in for controlling stake in the joint ventures so as to avoid the embarrassments similar to the ones of Sri Lanka, where the company failed to stave-off a hostile bid from a local businessman in Lanka Hospitals Corporation.

Apollo had to divest its entire stake of 33.22 per cent in the Lankan joint venture in favour of Sri Lanka Insurance Corporation and pull out of the country.

According to the Apollo Hospitals Group Chairman, Dr Pratap C. Reddy, the group finds it difficult to operate effectively with a minority holding in the joint ventures, either overseas or in the domestic market.

However, the revised strategy on equity holding would not apply to the joint ventures already signed such as the Rs 700-crore Mumbai hospital project, wherein JP Morgan would be holding 60 per cent equity, while Apollo would confine to 40 per cent stake.

"Going forward, we will be keen on holding controlling stake in as many joint ventures as possible," Dr Reddy told Business Line.

The Group is currently on a major expansion mode through joint ventures for setting up hospitals at Mumbai, Bangalore, Bhubhaneshwar, Visakhapatnam, Allahabad or Varanasi and Dehradun in the domestic market, apart from several overseas ventures, Dr Reddy said.