Mankind Pharma's maiden public offering, the first biggest IPO in terms of issue size, will open for subscription today. This will be the second initial public offering this calendar year after Avalon Technologies.
Here are 10 key things to know before subscribing the public issue:
1) IPO Dates
The offer will open for public on April 25, while the closing date would be April 27, 2023. The company will open its anchor book, a part of QIB portion, on April 24, a day before opening IPO.
2) Price Band
The price band for the issue has been fixed at Rs 1,026-1,080 per share.
3) Offer Size
The maiden public comprises only an offer for the sale of over 4 crore equity shares by promoters and investors, while there is no fresh issue portion.
The total fundraising by the company would be Rs 4,110.03 at the lower price band, and Rs 4,326.35 crore at the higher band.
Promoters Ramesh Juneja, Rajeev Juneja, and Sheetal Arora will be offloading over 1 crore shares via offer for sale, and the rest of the shares in the OFS will be sold by investors Cairnhill CIPEF, Cairnhill CGPE, Beige, and Link Investment Trust.
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4) Objectives of Issue
The main objectives of the offer would be to carry out the offer for sale by the selling shareholders and achieve the benefits of listing the equity shares on the stock exchanges.
All the money raised via public issues will go to selling shareholders, and the company will not receive funds from the offer.
5) Lot Size and Reserved Portion
Investors can bid for a minimum of 13 equity shares and in multiples of 13 shares thereafter. Hence, the minimum application size for retail investors would be Rs 14,040 for one lot of 13 shares, and the maximum investment would be Rs 1,96,560 for 14 lots (182 shares).
The company has reserved 50 percent of the offer size for qualified institutional buyers, 15 percent for high networth individuals, and the remaining 35 percent for retail investors.
Also read: Mankind to be a Bharat-focused player in listed pharma space
6) Company Profile
Mankind Pharma claimed to be India's fourth-largest pharmaceutical company in terms of domestic sales and third-largest in terms of sales volume for MAT December 2022, as per IQVIA dataset.
The company develops and manufactures a diverse range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.
The company's main focus has been the domestic market, which contributed 97.60 percent to the revenue from operations in FY22 and which has grew at a 12 percent CAGR between FY18-FY22 and 15 percent in FY20-FY22. The ranking of domestic sales in the Indian Pharma Market (IPM) has been improved from 8th in FY12 to 4th in FY22.
The consumer healthcare products business accounted 10 percent of domestic sales.
It has a presence in several acute and chronic therapeutic areas in India including anti-infectives, cardiovascular, gastrointestinal, anti-diabetic, CNS, respiratory, with having 23 manufacturing facilities across India.
After entering the consumer healthcare industry in 2007, it has established several differentiated brands in the condoms, pregnancy detection, emergency contraceptives, antacid powders, vitamin, and mineral supplements and anti-acne preparations categories.
It is a category leader in male condoms (Manforce brand enjoys 30 percent market share), pregnancy detection kits (Prega News brand has 80 percent market share), and emergency contraceptives (Unwanted-72 brand has 59 percent share).
It has a pan-India marketing presence, with a field force of 11,691 medical representatives and 3,561 field managers, as of December 2022.
Also read: Mankind Pharma trades in single-digit premium in grey market before April 25 IPO
7) Financial
The pharmaceutical company, which comes with a market capitalisation of Rs 43,264 crore, has reported a consolidated profit of Rs 996.4 crore for the nine-month period ended December FY23, falling 20 percent compared to year-ago period impacted by lower other income, higher employee cost and weak operating performance.
Consolidated revenue for 9MFY23 grew by 10.6 percent year-on-year to Rs 6,697 crore, while on the operating front, it has recorded nearly 13 percent YoY drop in EBITDA (earnings before interest, tax, depreciation and amortisation) at Rs 1,484 crore with margin falling 598 basis points compared to corresponding period last fiscal.
However, for the year ended March FY22, the performance was better, though we have seen operating margin contraction. Profit for financial year 2021-22 increased by 13.3 percent to Rs 1,433.5 crore and revenue rose by 25.2 percent to Rs 7,782 crore compared to previous year.
EBITDA for the financial year 2021-22 at Rs 1,989.35 crore grew by 20.7 percent, but margin dropped 96 bps to 25.56 percent compared to FY21.
8) Promoters
Ramesh Juneja, Rajeev Juneja, Sheetal Arora, Ramesh Juneja Family Trust, Rajeev Juneja Family Trust and Prem Sheetal Family Trust are the promoters of the company, having a shareholding of 67.29 percent in the company.
Currently, total promoters and promoter group's stake in the company stands at 79 percent, and the rest is held by investors including Beige, and Cairnhill CIPEF.
Ramesh Juneja is the Chairman and Whole-Time Director of Mankind, and Rajeev Juneja is the Vice-Chairman and Managing Director.
Sheetal Arora is the Chief Executive Officer and Whole-Time Director of the company, while Satish Kumar Sharma is the Whole-Time Director on the board.
Ashutosh Dhawan is the Chief Financial Officer of the company, while Pradeep Chugh is working as the Company Secretary and Compliance Officer, and Associate Vice President of the company.
9) Risks and Concerns
Here are key risks and concerns highlighted by brokerages (Nirmal Bang and Sharekhan):
a) Any intense competition in the company's key product or segment is likely to affect its future growth.
b) Any adverse observation from the USFDA could affect future product launches and in extreme cases could even lead to a ban on export of a given product.
c) As of FY22, the company has around 12.7 percent of total domestic portfolio under price control. It is likely that the Indian government may bring more such drugs and formulations under price control, which in turn will have an adverse impact on the company’s domestic value growth.
d) The company is heavily focused on the domestic Indian market and has historically derived a substantial portion of revenue from India. After India, its major markets are the US, Bangladesh, Sri Lanka and Nepal, and any developments in the pharmaceutical industry in these regions could have an impact on the company’s business operations.
10) Allotment and Listing Dates
Mankind will finalise the IPO share allotment by May 3. The refunds will be credited to the bank accounts of unsuccessful investors by May 4, while the shares will be transferred to demat accounts of eligible investors by May 8.
It will make the debut on the BSE and NSE on May 9. Currently, its IPO shares traded at around 7 odd percent premium in the grey market, compared to its upper end of price band, analysts on anonymity said. The grey market is an unofficial platform for trading IPO shares.
Kotak Mahindra Capital Company, Axis Capital, IIFL Securities, Jefferies India, and JP Morgan India are acting as the book running lead managers to the offer.
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