Funding BSV Deal: Mankind Pharma picks Kotak, IIFL for upto Rs 3,000 crore QIP

Mankind pharma

India's fourth largest drugmaker by domestic sales, Mankind Pharma , has engaged investment banks Kotak Mahindra Capital and IIFL Capital as it looks to launch a QIP (qualified institutional placement (QIP) of up to Rs 3,000 crore, three persons with knowledge of the matter told Moneycontrol on the condition of anonymity.

The proposed capital raise is part of Mankind Pharma's plan to fund the Rs 13,630 crore acquisition of private equity firm Advent International owned Bharat Serums and Vaccines ( BSV) in July.

"Kotak Mahindra Capital and IIFL Capital have been taken on board as advisors for the QIP, which is one part of a larger funding plan for the buyout," said one of the persons above.

A second person confirmed the same.

The third person told Moneycontrol that the QIP launch would depend on various factors like closing of the BSV deal and market conditions and no timeline has been fixed yet.

An email query to Mankind Pharma remained unanswered at the time of going to press. This article will be updated as soon as we hear from the firm. Kotak Mahindra Capital and IIFL Capital couldnt be reached for an immediate comment.

On September 23, Rajeev Juneja, the Vice Chairman and Managing Director of Mankind Pharma broke down the drugmaker's funding strategy for the BSV transaction in an interview to CNBC- TV18.

"The deal size is approximately Rs 14,000 crore. Of this, Rs 4,000 crore would come from the company side. Around Rs 3,000 crore would be via QIP, and Rs 7,000 crore would be for some kind of a loan. Let us hope that we just pay back this loan in next three years’ time. That's the kind of planning we have got right now," Juneja said.

At the end of day's trade on October 8, Mankind Pharma's market cap stood at Rs 1.04 lakh crore. Its share price has risen by 47.05 per cent in the last year.

Earlier this month, Mankind Pharma transferred its Over-the-Counter (OTC) business to its wholly owned subsidiary, Mankind Consumer Products on a slump sale basis. The move is part of the firm's strategy to sharpen its focus on the consumer business, which contributes 7 per cent to the overall revenue

In Q1 FY25, the OTC vertical registered revenues of Rs 206 crores, with an EBITDA margin of 19.5 per cent For FY24, it posted a total revenue of Rs 706 crores with an EBITDA margin of 19.9 per cent.

Last month, brokerage firm Investec initiated coverage on the Mankind Pharma stock with a 'buy' tag. The former believes the market is undervaluing BSV's specialty business in terms of its long-term growth potential and strategic significance, which will remain a key growth engine for Mankind Pharma.

Pls Read: Mankind Pharma jumps to record high; gains 9% in two days after Investec's 'buy' tag