Mankind Pharma files for IPO, could be second largest among pharma firms

The offer for sale is expected to be anywhere between Rs 5000-5500 crore, say sources

The fourth largest pharmaceutical company in the domestic market, Mankind Pharma, filed its draft red herring prospectus (DRHP) papers with the Securities and Exchange Board of India (Sebi) on Friday to raise funds through initial public offering (IPO). Sources say that the company is looking to raise Rs 5000- 5500 crore, making it one of the largest pharma IPOs in recent years.

The IPO will comprise an offer for sale of 4 crore equity shares by the promoters and existing shareholders, the DRHP said.

The promoters include Ramesh Juneja, Rajeev Juneja, Sheetal Arora, Ramesh Juneja Family Trust, Rajeev Juneja Family Trust and Prem Sheetal Family Trust. Investors like Chrys Capital and Capital International are likely to make a partial exit through the listing.

However, the company will not receive any proceeds from the offer, the DRHP said. “Our company expects that listing of the equity shares will enhance our visibility and brand and provide liquidity to its existing shareholders. Listing will also provide a public market for the equity shares in India,” it said.

The offer proceeds will be received by the selling shareholders. Despite several attempts, RC Juneja, chairman, Mankind Pharma, could not be reached for a comment.

Earlier this year, Macleods Pharma too had filed a DRHP for a Rs 5000 crore IPO. However, reports suggest that the company has put the plan on hold after a valuation mismatch, after discussions with investors. The largest pharma IPO filed in recent years was by Gland Pharma in November 2020 for Rs 6480 crore.

“We are India’s fourth-largest pharmaceutical company in terms of domestic sales and second-largest in terms of sales volume for the financial year 2022 (FY22) (IQVIA MAT March 2022),” Mankind said in the DRHP.

Mankind, the makers of marquee brands like Manforce condoms, Prega News, Gas-O-Fast etc, is focused on the domestic market, which contributed 97.6 per cent of its total revenues in FY22. It has largely grown organically. In the prescription segment, it has presence in hypertension (Amlokind), antibiotics (Moxikind-CV), vitamins (Nurokind) etc.

“We have created 36 brands in our pharmaceutical business that have each achieved over Rs 500.00 million in domestic sales in FY22 (IQVIA MAT March 2022),” it claimed. It has one of the largest distribution networks of medical representatives in the Indian pharmaceutical market, and over 80 per cent of doctors in the country have prescribed its formulations during FY22, the company said.

Started in 1995 by brothers Ramesh and Rajeev Juneja, Mankind operates in 34 overseas markets with 14,000 employees. It operates 23 manufacturing facilities.

Mankind posted consolidated revenues from operations of Rs 7781.5 crore in FY22, up from Rs 6214.4 crore in FY21. The profit for the year FY22 was Rs 1452.9 crore as against Rs 1293 crore in FY21.

It has a 4.4 per cent share in Indian pharma market.

Historically, an acute focused company, in the recent years, Mankind Pharma started focusing on chronic therapies. Arjun Juneja, director, operations, Mankind Pharma had told Business Standard last year that within three years, they eyed 50 per cent revenues from chronic therapy drugs. “Anti-infectives have a broader base for us, but the growth rate in chronic diseases is much faster. We expect to have at least 50 per cent share from chronic therapies in the next three to four years,” Juneja had said.

In the DRHP, the company has said that acute therapy portfolio has clocked a 16 per cent CAGR (compounded annual growth rate) between FY20 and FY22, whereas, chronic therapy portfolio has clocked an 18 per cent CAGR during the same period.