MC Exclusive | Mankind Pharma files papers for $700 million plus IPO

Private equity firm ChrysCapital-backed Mankind Pharma, the maker of top selling condom brand Manforce Condoms, has filed its DRHP ( draft red herring prospectus ) with market regulator Sebi with plans to raise upwards of $700 mn via an IPO , one of the biggest ever attempted by a player in the segment, multiple industry sources with knowledge of the matter told Moneycontrol.

The current record in the sector is held by Gland Pharma which launched an $869 million IPO in November 2020. Mankind Pharma is India’s fourth largest pharmaceutical company in terms of domestic sales and second largest in terms of sales volume for FY22.

Moneycontrol was the first to report the listing plans of the company on 28th April, 2022.

“ Mankind Pharma has done the e-filing of its draft papers. It is cash rich and has been trying to expand its OTC products vertical for better margins, so there is a strong consumer angle. The IPO will consist of solely an OFS or offer for sale component of 10 per cent ,” said one of the persons above.

Two other persons confirmed the filing of papers with the market regulator with one of them adding that since Mankind Pharma largely has a domestic business, it would resonate far more with investors than those pharma firms which have more overseas exposure.

A fourth person said that Mankind Pharma was targeting a valuation between $7bn and $8bn which could be revised upwards later depending on market conditions and that the selling shareholders eyeing a partial exit would include the likes of key investors like ChrysCapital and Capital International. The promoter family was also likely to dilute some stake, this person added.

JP Morgan, Jefferies, IIFL Capital,  Axis Capital and Kotak Mahindra Capital are the investment banks working on the IPO, sources added. Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas and Sidley are the law firms on the deal

All the four persons above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol has sent email queries to Mankind Pharma, ChrysCapital and Capital International but could not elicit an immediate comment from them. The IPO advisors couldn’t be reached immediately at the time of going to presss.

In 2015, Capital International had purchased a 11 percent stake in Mankind Pharma from ChrysCapital for $200 million. In April 2018, a ChrysCapital-led consortium, which included GIC and CPPPIB, made a stunning comeback and bought a 10 percent stake again for around $350 million.

Earlier in the year, Mankind Pharma had acquired the formulations brands of listed player Panacea Biotec in India and Nepal for  Rs 1,872 crore to explore new therapeutic areas.

The DRHP filing by Mankind Pharma comes at a time when there is uncertainty about the roadmap of two other large sized IPOs by pharma peers. Macleods Pharma has deferred its listing plans following a valuation mismatch with investors.

In August 2021, Bain Capital-backed Emcure Pharma had also filed papers with the regulator for a proposed Rs 4,500–Rs 5,000-crore IPO and got the go ahead from Sebi, but the issue hasn’t been launched yet.

The Delhi-based Mankind Pharma was founded by Ramesh Juneja and the firm became a fully integrated pharmaceutical company in 1995. The firm is engaged in developing, manufacturing and marketing a diverse range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.

The company is focused on the domestic market, as a result of which its revenue from operations in India contributed to 97.60% of its total revenue from operations for the Financial Year 2022, which was one of the highest among peers identified by IQVIA.

Kaloree 1, Prega News Unwanted-21 (oral contraceptive), AcneStar, Gas-O-Fast and KabzEnd (Ayurvedic product which treats constipation) are some of the other brands in the Mankind Pharma portfolio.

According to its website, it has an employee base of 14,000 and is present in 34 overseas destinations including the US, Sri Lanka, Cambodia, Kenya, Cameroon, Myanmar, and the Philippines.

Mankind Pharma had earlier joined hands with BDR Pharma to launch the anti-COVID-19 pill Molulife in India. For FY21, the firm clocked revenues of around Rs 6,385 crore, EBITDA of Rs 1,657 crore and PAT of Rs 1,293 crore.  The firm has 21 manufacturing units in various locations such as Paonta Sahib, Himachal Pradesh, Sikkim, Vizag and Rajasthan, its website says.