Indian hospital chain Apollo Hospitals Enterprise has announced the acquisition of a stake valued at Rs1.03bn ($12.37m) in its subsidiary, Apollo Health and Lifestyle (AHLL), through a rights issue.

The deal involves the acquisition of 35,12,107 equity shares of AHLL for Rs294 per share.

The rights issue is a way for Apollo Hospitals to raise additional capital by offering its current shareholders the opportunity to purchase additional shares at a discounted rate, the Economic Times reported.

AHLL operates a network of speciality and maternity hospitals, diagnostic centres, clinics and other healthcare facilities.

For the financial year ending 31 March 2024, AHLL reported a turnover of Rs13.65bn.

This strategic move aims to boost AHLL’s capabilities to provide quality healthcare services across India.

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The deal will also enable AHLL to utilise the funds for business operations, working capital, and expansion.

Apollo Hospitals’s shareholding pattern in AHLL will remain unchanged post-acquisition, ensuring that it remains a subsidiary.

In a stock exchange filing, the company said: “AHLL, being a subsidiary, is a related party of the company. The transaction falls within the ambit of related party transactions and is at arm’s length.”

In June this year, Apollo Hospitals Enterprise subsidiary Apollo HealthCo revealed plans to open three new hospitals in Mumbai and Bengaluru, India.

Two hospitals in Mumbai, each with 500 beds, will be constructed with an investment of around Rs20bn.

A 400-500-bed facility is planned for Bengaluru.

The expansion is part of Apollo Hospitals’ long-term strategy to invest approximately Rs30bn over three years to add 2,400 beds across various locations.