Mankind Pharma to raise ₹3,000 cr via QIP to fund acquisition of Bharat Serums; stock rises 2%

Shares of Mankind Pharma gained over 2% in early trade on Tuesday after the healthcare firm launched a qualified institutional placement (QIP) to raise up to ₹3,000 crore to partly finance its recent acquisition of Bharat Serums and Vaccines (BSV). The floor price for the issue is ₹2,616.55 per equity share, a discount of 2.75% to Monday’s closing price of ₹2,690.80 on the BSE.

Snapping previous session losses, Mankind Pharma shares rose as much as 2.3% to ₹2,753 in the first two hours of trade so far. Early today, the pharma heavyweight opened 2% higher at ₹2,748.65, after ending 0.4% lower in the previous session.

At the current level, shares of Mankind Pharma trade 4.5% lower than its 52-week high of ₹2,882.75 touched on November 6, 2024. The stock has risen 49% against its 52-week low of ₹1,849.95 hit on December 21, 2023. The counter has risen 39% in the last one year; 20% in six months; and 36% in the calendar year 2024.

In an exchange filing last evening, Mankind Pharma said that its board in its meeting held on December 16, 2024, approved raising of funds aggregating up to ₹3,000 crore through QIP by way of issuance of equity shares having a face value of ₹1 each of the company. The opening date of the issue is December 16, 2024.

“The floor price for the issue, being ₹2,616.55 per equity share (“Floor Price”), based on the pricing formula as prescribed under the SEBI ICDR Regulations,” Mankind Pharma said in the BSE filing.

“The fund raising committee of directors of the company may at its discretion offer a discount of not more than 5% on the floor price so calculated for the issue,” it added.

In July this year, Mankind Pharma announced acquisition of 100% stake in biopharmaceutical company BSV for ₹13,768 crore, which was later completed in October. The company’s wholly owned subsidiary, Appian Properties Private Limited, completed the acquisition of BSV on October 23, 2024, as per the terms and conditions of the share purchase agreement signed on July 25, 2024.

The deal will be funded through a combination of internal accruals and external debt, arranged through non-convertible debentures (NCDs) and commercial papers. The pharma major plans to retire, a portion of the debt through a potential equity raise, which has already been approved by the shareholders.

Rajeev Juneja, Vice Chairman and Managing Director of Mankind Pharma, in a recent interview said that the acquisition will be funded through internal accruals, QIP, and loans. The company will raise ₹7,000 crore through loans, 4,000 crore from internal accruals, and ₹3,000 crore via QIP, he explained.

As per the company, the strategic acquisition will bolster Mankind's position in the Indian women's health and fertility drug market alongside access to other high entry barrier products in the critical care segment with established complex R&D tech platforms.    

Earlier in October this year, Mankind Pharma’s board approved a fundraising plan of up to ₹10,000 crore and the transfer of its Over-the-Counter (OTC) business undertaking to its wholly owned subsidiary, Mankind Consumer Products (MCPPL). Mankind Pharma’s consumer products portfolio includes several trusted brands Manforce, HealthOK, Prega News, AcneStar, Unwanted and Gas-O-Fast across categories such as wellness, hygiene, and personal care products. The move is part of Mankind Pharma’s broader strategy to enhance its focus on the consumer business, which currently contributes 7% to the company's overall revenue.

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