Homegrown pharma major Mankind Pharma has set a price band at ₹1,026-1,080 per share for its upcoming initial public offering (IPO), which will hit the Street on April 24. At the upper band of the price band, the seller of condom brand Manforce and pregnancy test kit Prega News aims to raise as much as ₹4,326.36 crore via public offering, which is touted to be the biggest IPO in the pharma sector after the ₹6,480 crore public offer by Gland Pharma in November 2020. The value of the company is pegged at ₹43,264 crore at the top end of the offer price.
The IPO of the country’s fourth largest pharma company by domestic sales will open for subscription on April 25 and close on April 27. The shares of the company will be listed on domestic stock exchanges, BSE and NSE, on May 9.
The company has reserved up to 50% portion of IPO for qualified institutional buyers (QIBs), up to 15% for non-institutional investors (NIIs), and up to 35% for retail investors. The lot size of the issue is 13 shares.
The IPO of Delhi-based drug maker comprises an offer for sale (OFS) of 40.06 million equity shares by the company's promoters and existing shareholders. Post share sale, shareholding of promoters will decline to 76.50% from 79% at present. The promoters of the company include Ramesh Juneja, Rajeev Juneja, Sheetal Arora, Ramesh Juneja Family Trust, Rajeev Juneja Family Trust, and Prem Sheetal Family Trust, as per the DRHP (draft red herring prospectus) filed with SEBI. The existing shareholders Cairnhill CIPEF Ltd., Beige Ltd. and Link Investment Trust will also trim their stake in the company.
As per the document filed with SEBI, Ramesh Juneja will offload 3.71 million shares, Rajeev Juneja by 3.51 million, and Sheetal Arora by 2.80 million shares via OFS route. Foreign investor Cairnhill CIPEF will sell 17.41 million shares, Cairnhill CGPE (2.62 million shares), Beige (9.96 million shares), and Link Investment Trust (50,000 shares).
As the IPO is completely an OFS, the entire proceeds from the issue will be paid to the selling shareholders in proportion to the equity shares offered by them and the company will not receive any proceeds from the scheme.
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 revenue of ₹50 crore in 2000-01, ₹500 crore in 2006-07, and ₹5,000 crore in 2018-19. 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 US, Bangladesh, Sri Lanka and Nepal.
Mankind, which operates at the intersection of the Indian pharmaceutical formulations and consumer healthcare sectors, is looking to expand the scope of its R&D Centres and initiate several new forays. It spent ₹141.49 crore (FY20), ₹170.78 crore (FY21) and ₹213.44 crore (FY22) on R&D, respectively, representing 2.41%, 2.75% and 2.74%, respectively, of its total revenue from operations for such years. The management estimates that the spending will be around 2.5% in the last fiscal (FY23). It has a team of over 600 scientists (including approximately 40 scientists who hold PhDs) and a dedicated in-house R&D center with three units located in IMT Manesar, Haryana.