Apollo Hospitals to expand footprint with local tie-ups, bets on Modicare

India’s largest hospital chain Apollo, with a total capacity of 10,000 beds, is looking to sew partnerships with local healthcare sector players to expand its network and reach. The group, promoted by Prathap Reddy, is also bullish that the domestic healthcare sector will grow exponentially on the back of radial public health programs, such as Modicare, and the entry of other institutional players. There is an acute shortage of hospital beds and Apollo has been striving to provide quality healthcare through local partnerships and their chain of clinics and telemedicine units.

Accordingly, the single-hospital model had taken a backseat of late, owing to the group following the partnership route to expand capacity and enter new markets. Recently, in one of the biggest acquisitions in the Indian healthcare space, rival hospital chain Fortis tied up with Asian healthcare major IHH to emerge as a major competition for Apollo, with a combined capacity of 4600 beds. However, the group welcomed the development saying it was good for the domestic healthcare.

All state capitals were potential targets for Apollo, which continues to have a predominant presence in south India, but is now focusing on expanding footprints in the north. Apollo recently acquired a 50 percent stake for over Rs. 900 million in Lucknow-based Medics International Lifesciences Ltd, a 330-bed super-specialty hospital spread over 350,000 sq ft. It is expected to start functioning in the next two months. On Modicare, the flagship program of the Narendra Modi government to provide health cover of Rs. 500,000 per family per year and benefit 100 million poor and vulnerable households or roughly 500 million population, Apollo had pioneered advanced healthcare in India in 1983 and entered the health insurance space about 15 years back. Medics provided an excellent opportunity to Apollo to enter the Uttar Pradesh (UP) market. UP is known for large domestic tourist inflow and they hope Apollo acts as a magnet to attract more people coming to the state not only from India but also abroad.