Shares of the country's largest hospital chain Apollo Hospitals Enterprise on Monday witnessed a steep fall on investors' concerns over a rise in pledged shares by the promoters.
The stock touched an intra-day low of 13.26% at Rs 1,092 per scrip, the most since December 2011, before recovering slightly, and closing 10.64% lower at Rs 1124.95 a piece.
The fall in share price resulted in Rs 1,864 crore loss in market capitalisation on Monday.
According to a news report, Apollo Hospitals managing director Suneeta Reddy said the additional pledged shares, in the tune of 5% in January, were created due to the unwinding of the deal with KKR and Co.
Apollo promoters, who own 34.4% in the company, have 74.81% of their holding pledged as on December, 2018, 1.06% higher from the September 2018. From June 2017 till December 2018, the shares pledged by the promoters have gone up 6.95%. The investment was in the form of debentures that had an option to be converted into equity shares in the Chennai-based hospital chain at the end of five years.
According to an analyst, the borrowing is to the tune of Rs 1,400 crore as against the total promoter stake value of Rs 5,500 crore, of which 75% has been pledged. While the quantum of pledge shares has gone up, the borrowing is steady at Rs 1,400 crore. The borrowings were used for the subscription of Apollo warrants and investment in its insurance arm, the analyst said.
According to him, the management has clarified that the pledge quantum will come down by around 60% over fiscal 2020, and some assets, including certain stake in Apollo Munich Health Insurance Company Ltd, can be sold to pare down the debt, over the next six months.
The healthcare company has recently reported a 17% increase in its revenue in the quarter ended December, 2018, while its Earnings before interest, tax, depreciation and amortisation, and profit after tax grew 28% and 25%, respectively.
Apart from Apollo Hospitals, shares of Emami, PC Jewellers, Graphite India, and KRBL also tanked between 8.78% and 10.18% on Monday on BSE. The benchmark key index Sensex fell 0.41% to 36395.03 points.
BATED BREATH
- Apollo promoters have 74.81% of their holding pledged as on December, 2018, 1.06% higher from the September 2018
- From June 2017 till December 2018, the shares pledged by the promoters have gone up 6.95%.