Mankind Pharma IPO to open on April 25; Here’s what MD Rajeev Juneja & brokerages say

Mankind Pharma (MPL), the country’s fourth-largest pharmaceutical company in India by domestic sales and third-largest by sales volume, is set to hit the capital market on April 25 with initial public offerings (IPO) of over Rs 4,300 crore. The company has fixed a price band of Rs 1,026 per equity share to Rs 1,080 per equity share. Investors can bid for a minimum of 13 equity shares and in multiples of 13 equity shares thereafter. The public offer will close on April 27, 2023.

The IPO consists of an offer for the sale of 40,058,844 equity shares, amounting to Rs 4,326.36 crore. The objects of the offer are to carry out the offer for sale by the selling shareholders and achieve the benefits of listing the equity shares on the stock exchanges.

Ahead of the company’s IPO, Rajeev Juneja, Vice Chairman and Managing Director, Mankind Pharma in a presser said, “Amid the ongoing uncertainty, this market is good for defensive players like us. We are a fundamentally strong debt-free company. We are coming with an offer for sale because we are committed to giving an exit to our investors.” He further said that they are generating substantial cash every year and the acquisition of Panacea Biotec was self-funded.

With 97 per cent of its revenue from India, MPL sells pharmaceutical formulations and consumer healthcare goods and operates 25 manufacturing sites and a specialised R&D centre with four divisions.

In the consumer healthcare category, Manforce ranked 1st in the male condom category (market share of 30 per cent), Prega News ranked 1st in the pregnancy test kit category (market share of 80 per cent) and Unwanted-72, ranked 1st in the emergency contraceptive category (market share of 62 per cent).
The company’s revenue from operations grew at a CAGR of 15.2 per cent between FY20 and FY22 from Rs 5,865 crore to Rs 7,782 crore. Profit after tax increased at a 17.3 per cent CAGR during the same period.

While sharing its advice with investors, Geojit Financial Services said, “At the upper price band of Rs 1,080, MPL is available at a P/E of 30 times (FY22), which appears reasonably priced compared to peers.”

“Considering under-penetration of healthcare services and lower consumer expenditure in healthcare in India, MPL’s focus on chronic therapeutic areas, emphasis on increasing penetration in metro and Class I cities, growth in the consumer healthcare business, good financial performance and strong distribution network, we assign a “Subscribe” rating on a long-term basis,” the brokerage said.

ICICIdirect also gave a ‘Subscribe’ rating to the issue. “We assign ‘Subscribe’ rating on the back of opportunities from its newer acquired products, its plan to backwards integrate with its power brands and structural preference for domestic branded formulations among broader healthcare themes,” ICICIdirect said in a report.

Asit C Mehta Investment Interrmediates recommended subscribing to the issue from a long-term perspective.

“Mankind benefits from the industry experience and business acumen of their individual promoters and is driven by the 3 core values of quality, affordability and accessibility. Their professional and experienced management team has been critical in building their brands, growing their operations and maintaining capital efficiency despite their emphasis on affordable product offerings. The company strives to maintain corporate governance standards. The company is focused on sustainability in their operations as well as on the health and safety of their workforce and have undertaken initiatives relating to optimising energy usage and minimising dependence on conventional sources of energy to reduce carbon footprint,” the brokerage said.