Mankind Pharma's Rs 4,326-crore IPO garners bids worth Rs 50,000 crore

The Rs 4,326-cr offering garnering bids worth nearly Rs 50,000 cr

Mankind Pharma’s initial public offering (IPO), which closed on Thursday, saw 15 times more demand than shares on offer, propelled by strong demand from institutional investors, even as the retail portion remained undersubscribed.

The institutional investor portion of the IPO was subscribed nearly 50 times, the high net worth individual (HNI) quota garnered 3.8 times subscription, while the retail investor portion was subscribed just 92 per cent.

Including anchor investor demand, the Rs 4,326-crore IPO — the largest in more than a year — generated bids worth close to Rs 50,000 crore, raising hopes of a revival in the primary markets.

Anchor investors had subscribed to shares worth nearly Rs 1,300 crore of Mankind Pharma, the fourth largest pharma company in India in terms of sales.

The company’s IPO was entirely an offer for sale by its promoters, global private equity firm Cairnhill, and a few other investors.

Mankind had set a price band of Rs 1,026-1,080 per share for the IPO. At the top end, the company will be valued at Rs 43,264 crore, about 30 times its FY22 earnings. The valuations were in line with other listed pharma players.

Mankind is engaged in developing, manufacturing, and marketing pharmaceutical formulations, as well as, several consumer health care products. The company is focused on the domestic market, and as a result, its revenue from operations in India was 97.6 per cent of its total revenue from operations for the financial year ended March 31, 2022 (FY22).

The company sells the Manforce brand of condoms, which has a 30 per cent market share, while its pregnancy test kit Prega News commands 80 per cent of the market.

“Mankind Pharma benefits from its strong foothold in domestic branded formulations with emphasis on affordable product offerings. We assign ‘subscribe’ rating on the back of opportunities from its newer acquired products, and its plan to backward integrate in its power brands, and structural preference for domestic branded formulations, among broader health care themes,” ICICI Direct had said in a note.