From private firm to private equity: The cycle of growth in India

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Shobana Kamineni, Executive Vice Chairperson - Apollo Hospitals, Private healthcare, India

Apollo Hospitals is one of the leading hospital chains in India, with an international reputation and an outstanding track record in harnessing the power of new technology.  

The business was founded by Dr Prathap C. Reddy in the 1980s, when he returned from working in the US and saw how far Indian healthcare was lagging behind. He galvanised a group of doctors from across India and beyond to invest in a hospital, and it opened in Chennai in 1983. His four daughters were involved from the start, and Shobana Kamineni was employee number three. She is now the Executive Vice Chairperson, and Apollo boasts 64 hospitals, 150 clinics, over 9,000 beds, almost 2,500 pharmacies, and a health insurance business.  

Shobana sees the evolution of the business in three phases: “In the beginning, we were a straightforward family business with all the advantages and challenges that brings. But while we had great expertise in our own field – healthcare – we needed to hire talented people to help us build a robust business. People with financial expertise, for example.” In the second phase, Apollo was listed on the stock exchange, which allowed the family to grow to three hospitals, but also brought increased demands in terms of reporting, accountability, and governance. The board was also strengthened with more independent directors, who still play a key role.

Shobana Kamineni, Executive Vice Chairperson - Apollo Hospitals

Shobana Kamineni, Executive Vice Chairperson - Apollo Hospitals


The third phase was Private Equity. “We were one of the first Indian firms to get PE funding in the late ‘90s, when India first opened up to foreign direct investment.  But we thought about it carefully before we did it: we sat down as a family to discuss it because we knew things were going to change radically, and we’d have to be even more accountable, and willing to adapt. We also knew that PE work to a very different timescale to families: PE houses are looking for a quick return on their money, and I’m glad to say that every PE investor we’ve had has achieved a good exit price. That’s why our share price is so high: we do what we promise.”

Apollo Hospitals, India

Apollo Hospitals, India


Having Private Equity investors also focused the business more on short-term performance: “This is one of the biggest differences between PE and family business. Family businesses have uniquely infinite perspective - if you don’t reach your target this quarter, you can always do it next quarter. What PE taught us was quarter-to-quarter performance. That really sharpened us up. I think we’re actually unique in that we grew around 25% for 25 consecutive quarters. PE can be very active investors too: some of our PE investors have been in on a weekly basis, so they could really understand how we operate. You have to not just accept that, but welcome it, or the partnership isn’t going to work.”

Looking ahead, Apollo has built a strong competitive advantage on new technology. “We have an innovation division where the employees work with innovation labs in Israel, the US and elsewhere in India. We incubate new ideas, and work hard to keep pace with new developments. We also encourage our doctors to take part in conferences and research forums across the world, and to collaborate actively with one another.  We don’t let people or ideas get stuck in silos. This is one reason why we now have three dynamic new companies within the Apollo group: one doing analytics, one working on stem cell therapies and personalised medicine, and one working on digital and telemedicine. The latter has given us huge visibility, and allowed us to reach many more people. I doubt there are many businesses doing this sort of thing better than we are. That’s something we’re very proud of.”

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