Mankind Pharma shares in focus on likely block deal; chances of stock's inclusion in MSCI index up

Nuvama Alternative & Quantitative Research noted that the three PE investors were looking to sell up to 7.9 per cent of outstanding shares in Mankind Pharma on December 12 and that it believes that there could be a significant increase in free-float post such block deal, as the current free float for Mankind Pharma 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. 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). According to Nuvama Alternative's calculations, the expected inflow is around $28 million (1.2 million shares, five days impact). The adjustment of block-led float change will take place later.

As per a Moneycontrol report, the three investors were looking to sell stake valued at about $592 million. Considering the up size option, the deal size may go up to $677 million, a source told Moneycontrol.

A second source told Moneycontrol that the combined stake up for sale at base size would be 6.9 per cent and for the upsize option, the combined stake size diluted by the three investors would be 7.9 per cent.

IIFL Capital and Kotak Mahindra Capital were believed to be acting as advisors for the proposed block deal.

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