The biggest initial public offering (IPO) of this year from Mankind Pharma, a company that sells condom brand Manforce and pregnancy test kit Prega News, has received overwhelming response from qualified institutional investors (QIBs) and non-institutional investors (NIIs), but it failed to excite retail investors. The ₹4,326 crore public offering of the Delhi-based company was subscribed 15.3 times on the final day of the offer on Wednesday.
The portion reserved for QIBs was subscribed 49.16 times, while quota for NIIs was booked 3.8% times. However, the IPO received tepid response from retail investors as the quota reserved for them received 0.92 times bids.
As per the latest data available on the BSE, the company received bids for 42,95,12,902 shares against 2,80,41,192 shares on offer. While the QIBs' segment received 39,38,34,103 against 80,11,769 shares on offer, the non-institutional investors' portion received 2,28,22,761 shares against 60,08,827. The quota for retail investors' portion received bids for 1,28,56,038 shares against 1,40,20,596 on offer.
The lot size of the offer was 13 shares, which means minimum application amount for a retail investor was ₹14,040 (₹1,080 x 13).
The three-day IPO of Mankind Pharma opened for subscription on April 25 with a price band of ₹1,026-1,080 per share, valuing the company at ₹43,264 crore at the top end of the offer price. The share of the company is expected to be listed on domestic stock exchanges, BSE and NSE, on May 9. This is expected to be the biggest IPO in the pharma sector after the ₹6,480 crore public offering by Gland Pharma in November 2020.
The IPO of the country’s fourth largest pharma company was completely an offer for sale (OFS), which means the entire proceeds from the issue would be paid to the selling shareholders in proportion to the equity shares offered by them and the company would not receive any proceeds from the scheme.
Ahead of the IPO, the homegrown pharma company raised ₹1,297.90 crore by allotting 1,20,17,652 equity shares at upper end of price band at ₹1,080 per share to 77 anchor investors (including 16 domestic mutual funds through a total of 41 schemes). The anchor investors include Canada Pension Plan Investment Board, Government of Singapore, Monetary Authority of Singapore, Goldman Sachs, Fidelity, Blackrock, Abu Dhabi Investment, Nomura, Morgan Stanley, HDFC Trustee, SBI MF, ICICI Prudential, FIAM Group Trust, National Pension Service by Blackrock, Government Pension Fund, Ashoka India, Motilal Oswal, Nippon Life India Trustee, Axis MF, Kotak MF, and others.
Most of analysts have assigned “SUBSCRIBE” rating to Mankind Pharma IPO, citing opportunities from its newer acquired products and its plan to backward integrate in its power brands. The firm’s growing presence in areas of chronic therapy, and high brand recognition as well as good track record of operational & financial performance also augur well for the company.
Established in 1991, Mankind Pharma, the country’s fourth largest pharmaceutical company in terms of domestic sales for the financial year 2022, generates 98% of its revenue from India. The company, which manufactures emergency contraceptive brand Unwanted-72, Gas-O-Fast ayurvedic antacids, and acne-treating medicine AcneStar, is a net debt-free company which generated profit after tax (PAT) of ₹1,030.5 crore in 2019-20, ₹1,253.9 crore in 2020-21, and ₹1,419.2 crore in 2021-22. For the nine-month ended December 31, 2022, the company’s PAT stood at ₹986.9 crore. For the financial years 2020, 2021 and 2022, the company's revenue from operations in India amounted to ₹5,788.8 crore, ₹6,028 crore and ₹7,594.7 crore, respectively, representing 98.70%, 97.01% and 97.60%, respectively, of its total revenue from operations. After India, its major markets are the U.S., Bangladesh, Sri Lanka and Nepal.
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