CHENNAI: As a part of its restructuring exercise, Apollo Hospitals Enterprise on Wednesday said that it is divesting its front-end pharmacy business to Apollo Pharmacy for a lump sum cash consideration of Rs 527.8 crores. 

Apollo Pharmacy (APL) will be a wholly owned subsidiary of Apollo Medicals. The listed parent company, Apollo Hospitals Enterprise will hold 25.5% stake in Apollo Medicals (AMPL) and the remaining 74.5 % will be held by investors, including Jhelum Investment Fund, Hemendra Kothari and ENAM Securities. Specifically, Jhelum Investment Fund 1 would hold 19.9 %, Hemendra Kothari would hold 9.9 % and ENAM Securities would hold 44.7 % of the total share capital of AMPL. 

In a note to the exchanges the company said that APL will "focus on building a multi-year growth platform for the stand-alone pharmacies business to get to a medium-term target of over 5,000 pharmacy outlets over five years with a goal of over Rs 10,000 crore in revenues". 

Apollo Pharmacy has 3167 outlets as of September 30, 2018, in 400 cities/towns said it is currently serving about 300,000 customers with an employee strength of about 21,000 people. 

The company added that the proposed reorganization would not have a material impact on the financials of AHEL as the “backend business related to the standalone pharmacies which represents 85% of the business economics will continue to be held by AHEL.”