Apollo Hospitals will divest minority stake in Apollo Health Street, the group’s business process outsourcing division.

The company is scouting for partners from the IT space. “We are looking at 3-4 contenders – both global and domestic firms – who want to strengthen their health IT portfolio. Apollo Health Street is profit making and is the 3rd largest in this space. But it has the potential to grow more and we want to get a tactical partner for that,” said Dr Prathap C. Reddy, Chairman, Apollo Hospitals.

Currently, the Apollo management and family members hold 54 per cent stake in Apollo Health Street. The rest is held by PE firms such as One Equity Partners and Temasek Holdings. Apollo held a board meeting on Wednesday to decide the merchant bankers for the divestment proposal.

The hospital group, which will add 2,400 beds by FY14, is looking to invest Rs 1,500 crore. Part of this will be funded by Apollo’s recent QIP which raised Rs 330 crore; the group already has Rs 600 crore. Promoters will bring in Rs 100 crore. The rest will be raised via internal accruals.

While the company is not averse to acquisitions, acquiring existing hospitals will not solve the problem of bed-shortage in the country, which needs 100,000 beds a year, said Dr Reddy.

Talent is another big issue in the country. “We hope to address this by setting up a medical college in Hyderabad and later Chennai,” said Dr Reddy. Built at an investment of Rs 100 crore, the proposed college in Hyderabad will take in 100 students initially. The Medical Council of India will soon conduct an inspection.

“We hope the college will start functioning from the next academic session,” said Dr Reddy, on the sidelines of an event to announce an MoU with Apollo Endosurgery, Austin and Albert Einstein College of Medicine and Beth Israel Medical Centre, New York City of the US to provide scar-less bariatric surgery in India.