Looks like the market is liking the way in which Apollo Hospital Enterprise is working towards fulfilling its promise of debt reduction.
The company announced yesterday that it is selling its entire 10% stake in Apollo Munich Health Insurance company to HDFC for Rs.300 crore.
This is part of the deal where HDFC is buying majority stake of 51.2% in Apollo Munich for Rs.1347 crore and then merge it with HDFC Ergo, its insurance arm. The entire acquisition is expected to be completed before end of 2019 and merger will happen by end of March or early April.
Apollo has guided that by March 2020, it will bring down its debt to Rs.2500 crore from the current Rs.3200 crore. It has also promised to bring down the pledged shares of promoters to 50%. Currently, 78% of promoters 34.40% stake is pledged.
In the earnings call with analysts, the company had said that apart from insurance, it would look at selling stake in its pharmacy business and 50% stake sale in its cancer treatment center, Proton.
The market reacted very happy to this news in the opening session, it opened with a gain of over 2.5% at Rs.1386.95, going up to Rs.1403.90, which is not too far from its 52-week high of Rs.1411.90.