Bank One eyes Apollo Health Street stake

The New York-based Bank One, a part of JPMorgan Chase that was created this year as a merger between JPMorgan Chase & Co and Bank One Corporation, is expected to take a minority stake in Apollo Health Street, the BPO subsidiary of the Rs 550 crore Apollo Hospitals Group.

Interestingly, now the corporate hospital major has indicated that its BPO subsidiary could be the first company from the group stable that could go in for a Nasdaq listing.

While it is still not known as to how much of a stake Bank One would get, what is clear is that the deal would be one wherein Bank One would be giving business to Apollo Health Street.

Prathap C Reddy, chairman of the Apollo Hospitals Group told Business Standard that the deal was expected to go through in the next couple of weeks.

"Bank One has a lot of hospital groups as its clients in the US and which can become a big money spinner for our BPO business. The deal is very clear that they give us some business and we give them some equity," Reddy said.

"Our chief marketing officer is in the US to iron out the deal with Bank One and it should be clinched in the next couple of weeks. The nature of the work that they can outsource to us is billing, coding and adjudication," he said.

Apollo is also in the process of expanding its medical BPO capacity by almost doubling capacity to about 500 seats by the end of the year, from 250 seats a year earlier.

At present, Apollo HealthStreet has a 400 seat capacity at Hyderabad and this will touch 500 by the end of the fiscal.

The Apollo group's medical BPO business not only provides call-centre services but also billing, coding and claims processing. While the BPO business fetched the group, revenues of $3 million in the last fiscal, it is targeting to earn $10 million in the next fiscal.

The dollar led revenue growth is one of the reasons why the group thinks that listing the BPO subsidiary in the Nasdaq would be a better bet, than taking Apollo Hospitals Enterprises Ltd, the parent company to the Nasdaq.

This apart, the group is also planning to expand its BPO operations to another city, apart from Hyderabad.

"Delhi, Pune, Ahmedabad, Chennai, Kolkata and Colombo are the cities that we are looking at," Reddy said.

The proposed BPO expansion will see the seat capacity being ramped up by another 250 seats and from the indications available the toss-up is between Chennai and Colombo.