Mankind Pharma shares drop 5% amid block deals; these 3 PE firms are likely sellers

Shares of Mankind Pharma Ltd dropped about 5 per cent during the trading session on Tuesday amid a block deal report in the company. A host of private equity funds are likely sellers in the block deal, a few media reports suggested.

According to data, 3.5 crore shares or 8.7 per cent equity worth Rs 6,412 crore exchanged hands in the block deal. A total of Rs 1.7 crore equity shares of Mankind Pharma amounting to more than Rs 3,100 crore were traded as of 9.45 am, while 2.18 crore shares worth Rs 4,000 crore were bought and sold on the National Stock Exchange as of the same time.

The heavy volumes in the early trading session of the company suggest that block deals have been executed in the early session. However, Business Today independently could not ascertain the details of buyers and sellers at the time of writing this report. The block deal data will be shared by the exchanges later in the day.

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Amid the heavy trading volumes, shares of Mankind Pharma dropped about 5 per cent to Rs 1832.30 on Tuesday, with a total market capitalization of little more than Rs 74,000 crore. The scrip was settled at Rs 1,918.75 in the previous trading session. The stock is down 10 per cent from its 52-week high at Rs 2,039.95 hit on November 11, 2023.

According to reports, five private equity funds— Link Investment Fund, Cairnhill CIPEF, Beige Investment, Cairhill CGPE and Hema CIPEF- were looking to pare stake in Mankind Pharma worth at least $592 million via the block deal route. The floor price was said to be around Rs 1785.65 per share, a discount of about 8 per cent from its previous close.

Shares of Mankind Pharma were listed at the bourses in May this year, when the company raised at total of Rs 4,326.36 crore via its primary stake sale by selling its shares at a price of Rs 1,080 apiece. The stock is currently trading 70 per cent higher its issue price.

Incorporated in 1991, Mankind Pharma develops, manufactures, and markets pharmaceutical formulations across various acute and chronic therapeutic areas and several consumer healthcare products. Mankind Pharma has one of the largest distribution networks of medical representatives in the Indian pharmaceutical market.

Nuvama Alternative & Quantitative Research noted that the PE investors were looking to sell stake could lead to a significant increase in free-float of the Mankind Pharma, as the current free float for the company stands merely at 10 per cent.

"If the revised shareholding for the December quarter is reported on exchanges by January 17, 2024, a surge of over 18 per cent, crossing approximately Rs 2,250 level till January 17th, could position the stock for inclusion in the MSCI Standard Index during the February 2024 review" it said.

Nuvama Alternative Desk estimates a potential inflow of $112 million, equivalent to 4.8 million shares, with a 20-day volume impact," it said. A couple of weeks ago, FTSE already announced Mankind’s inclusion set for December 15, 2023, Friday. The adjustment of block-led float change will take place later.

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