Foreign brokerage firm CLSA (Mauritius) Ltd today sold around 6 million shares in Apollo Hospitals Enterprise (AHEL) for Rs 824.92 per share, which accounts to a total of around Rs 494.95 crore. Meanwhile, private equity firm Apax Partners is also looking at selling its stake in the country's leading hospital chain, according to sources.
Earlier during the day, the stock price of Apollo Hospitals has dropped by 7.95% in response to the reports stating CLSA planning to sell its entire stake in the company. The share price of the company dropped by Rs 69.55 or 7.95% to Rs 805.35 in Bombay Stock Exchange (BSE).
CLSA has around 8.558 million shares in AHEL, which accounts to around 6.15% of the total share in the company. According to a bulk deal announcement in National Stock Exchange (NSE), CLSA today sold around 70.11% of its stake, around 6 million shares, even as Fidelity Management and Research Company today picked up 9,07,000 shares in the company for Rs 823.97 per share, which comes to an accumulated price of around Rs 74.78 crore.
The shares held by CLSA is of three different P-Notes, for which the owners are unknown to the investee company, it is learnt. P-Notes are issued by registered foreign institutional investors (FII) to the overseas investors who would like to invest in the Indian stock markets without registering themselves with Sebi.
Sources in Apollo said that the sales of stake by CLSA in AHEL might be due to the redemption pressures during the end of December, which is financial year end in some countries. CLSA has picked up around 7.5% stake in AHEL almost four years back through open market operations.
Meanwhile, Apax Partners LLC, which holds around 1,34,46,657 shares, which is around 9.57% of the total equity shares in AHEL, is also looking for stake sale, according to sources. According to some reports, the private equity firm picked up around 11% stake in AHEL in 2007 investing around $100 million.
An official from AHEL, who did not wanted to be identified, today said that the company has not received any indication from Apax Partners on stake sale. “They have invested almost five years back and it is normal that the investors review their investment in five years. They have not intimated anything officially,” said an official earlier.
According to sources close to the investment, AHEL has a Right of first refusal (ROFR) with Apax Partners and the company would be informed first before the private equity firm sells its stake. Meanwhile, Apax Partners were not available for comment.
However, there is no need of panic about the reports on Foreign Institutional Investors (FII) exit from AHEL, "since the company would always remain in the horizon of every investor who look at healthcare market in India," said Siddhant Khandekar, chief manager of ICICI Direct.
In the event of CLSA, profit booking was the need of the hour and the returns on AHEL from first week of January has grown more than 50%. “There might be some FII-to-FII trading, but there is no need to be panic. There will always be a buyer for these shares,” he said. With the pharmacy business growing around 30% a year and started showing profit and a possibility of FDI, along with the growing healthcare business, the opportunities for the company for growth is huge, he added.
CLSA is the third-largest institutional investor in AHEL, while Apax Partners with 9.67% stake and Integrated Mauritius Healthcare Hodlings Ltd with 7.91% stake in the company, till end of September, 2012. Integrated (Mauritius) Healthcare Holdings Ltd also has around 2.94% stake in the company, according to the shareholder's information available with the BSE.
The other investors in the company include BNY Mellon Investment Funds Newton Oriental Fund (2.37%), International Finance Corporation (1.81%), Emerging Markets Growth Fund Inc (1.76%), Munchener Ruckversicherungsgesellchaft Akliengesellschaft in Munchen (1.72%) and Smallcap World Fund INC (1.14%).
