Apollo Hospitals demerger is a call for shareholders, says Suneeta Reddy; rules out family breakdown

The ongoing restructuring of Apollo Hospitals Enterprise to spin off its pharmacy and digital healthcare businesses was a purely managerial decision to sharpen strategic focus and create shareholder value, director Suneeta Reddy told ET, rejecting any suggestion of family differences or change in the dynamics of the promoters. “Let’s not think about it from a family lens. Every decision is taken based on what is good for the company and shareholders,” Reddy, who heads the country’s largest pan-India hospital chain by revenue, told Rica Bhattacharyya in an exclusive interview. “I speak to my sister (Shobana Kamineni, executive chairman of the spun off entity) every other day. We work very closely together,” she said.

Also read: Apollo Hospitals approves major restructuring plan; to list digital health and pharmacy armsHospital and pharmacy digital businesses have very different economics, return profiles and growth engines, making separation critical to value creation.

Was Apollo’s restructuring an exercise in future-proofing governance – something that family-led groups often do to establish clearer ownership and leadership accountability?

What we do at Apollo is never through a family lens. That’s what’s good for the company. A big part of Apollo 24/7 (India’s largest online pharmacy and digital healthcare platform) is retail… it’s a different business, the ROCE (return on capital employed) is different, it’s measured differently and the workforce is different. The spin-off was aimed at creating value for shareholders. It was always a thought that this company should be separated; it must be more efficient and benefit all shareholders. Apollo HealthCo (pharmacy distribution and digital health holding company), which is on track to list in FY27, will grow 20%, while the hospital sector will grow 18% over the next three years.

Apollo has been at the forefront of India’s healthcare transformation for decades. How do you define the company’s mission today?Our transformation is taking place in preventive healthcare, with non-communicable diseases accounting for more than 60% of the total disease burden. We have a genetic predisposition to heart problems, cancer rates are increasing by 18% every year and we have the largest diabetes population in the world. Our focus will therefore be on prevention.

The hospital chain has added beds selectively and not aggressively in recent years. What is the company’s next phase of expansion?

Metros will continue to be part of our expansion plans, as will Tier-I cities. We have a significant focus on Delhi and Gurgaon. Tier-II cities are also emerging markets where we want to expand our presence. India remains a land of healthcare opportunity, with fewer than 70,000 private beds in the country and an increasing burden of disease. We like to work with asset-light models. We also remain open to acquisitions.

Also read: Apollo Healthtech aims to list by January-March 2027

You led Apollo through major strategic shifts. What has been your main focus so far?

One of the most significant changes is the post-Covid realization that we need more hospitals like Apollo, and the investments made in healthcare have been beyond dramatic. We’re going to go back to strengthening our presence in Tier I and go back to Tier II and build the network. While we had all these in different verticals – including healthcare services, Apollo Healthcare & Lifestyle in retail healthcare and diagnostics, and digital and pharmacy company Apollo HealthCo – the most important thing happening now is the integration across all verticals. The next pivot will come from the government: it has done an excellent job rolling up insurance. Now the private sector must work together so that more people continue to invest.

What are the key strategic priorities for the next five years?

We currently have three strong vertical markets that are growing at a healthy pace. We are well prepared to serve both our growing geriatric population and millennials. And then we have the third cohort – Gen Z – who need a different kind of relationship with health. Their interventions will include preventive health, lifestyle and nutraceuticals so that we can leverage all the lessons learned from the previous cohorts.

We remain early adopters and leaders in technology. Our investments in telemedicine and AI-powered clinical intelligence have the potential to scale our high-quality clinical offerings to large populations.

How is Apollo preparing for leadership succession and a smooth transition to the next generation?

As for the next generation, they have already started contributing to various aspects of the company. We have tailor-made mentoring programs for each of them. We would like to ensure that their contribution prepares them for succession and builds new growth streams.