Chrys Capital-backed Mankind Pharma may float Rs 4,200-4,700 crore IPO in April

Mankind Pharma plans Rs 4,700-crore IPO.

Mankind Pharma, India’s fourth largest pharmaceutical company in terms of domestic sales and second largest in terms of sales volume for the financial year 2022, is geared up for a widely anticipated IPO to raise around Rs 4,200 crore to Rs 4,700 crore later this month, multiple industry sources with knowledge of the matter told Moneycontrol.

If plans fructify, this would be the biggest IPO in the segment since the Rs 6,480 crore IPO launched by Gland Pharma in November 2020.

Moneycontrol was the first to report the listing plans of Mankind Pharma on April 28, 2022.

The Delhi-based pharma major later filed its DRHP (draft red herring prospectus) with Sebi in September 2022.

Mankind Pharma which is backed by private equity firm Chrys Capital and Capital International and manufactures top-selling condom brand Manforce Condoms, pregnancy test kit Prega News and emergency contraceptive brand Unwanted -72 is planning to float the IPO in the third or fourth week of April, according to one of the persons cited above.

A second person confirmed the expected launch timeline.

"This is a high-quality, scaled-up player with a good business mix which has grown at a fast pace and received a strong response during the roadshows. The IPO is intended to be a pure OFS or offer for sale of 10 percent stake and the selling shareholders include Chrys Capital, Capital International, the promoter family and others," a third person told Moneycontrol.

A fourth person told Moneycontrol that the final valuation of the firm would be frozen in the next few days and had been adjusted as compared to earlier projections based on the current market conditions.

"If a large-sized IPO like this does well on the bourses, then that would send a much-needed positive signal to the IPO market in the current environment," this person elaborated.

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

Moneycontrol is awaiting an email response sent to Mankind Pharma and has sent reminders. This article will be updated as soon as we hear from the firm.

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

In 2022, Mankind Pharma acquired the formulation brands of listed player Panacea Biotec in India and Nepal for Rs 1,872 crore to explore new therapeutic areas.

Some of the listing plans of Mankind Pharma's peers haven't taken off in the past two years. For instance, in September 2022, Macleods Pharma deferred its listing plans following a valuation mismatch with investors.

In August 2021, Bain Capital-backed Emcure Pharma 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.

Kotak Mahindra Capital, Jefferies, IIFL Capital,  Axis Capital and JP Morgan are the investment banks working on the Mankind Pharma IPO. Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas, AZB & Partners and Sidley Austin are the law firms on the deal.

A closer look at Mankind Pharma

Mankind Pharma was founded by Ramesh Juneja and the firm became a fully integrated pharmaceutical company in 1995. It 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 firm is focused on the domestic market, as a result of which its revenue from operations in India contributed to 97.60 percent of total revenue from operations for the financial year 2022, which was one of the highest among peers identified by IQVIA (being key pharmaceutical companies operating in similar therapeutic areas (Source: IQVIA Report).

It operates at the intersection of the Indian pharmaceutical formulations and consumer healthcare sectors intending to provide quality products at affordable prices and has an established track record of building and scaling brands in-house.

Mankind Pharma has created 36 brands in the pharmaceutical business and is armed with one of the largest distribution networks of medical representatives in the Indian pharmaceutical market. Over 80 percent of doctors in India prescribed its formulations during the financial year 2022 (Source: IQVIA Dataset, IQVIA Medical Audit MAT March 2022 for India), which has assisted the firm in establishing its brands in India.

The firm's brands have enabled it to consistently generate the highest share of drug prescriptions in the IPM over the last five years (Source: IQVIA Dataset, IQVIA Medical Audit MAT March 2022 for India).

Over and above Manforce Condoms, Prega News and Unwanted -72, Mankind Pharma has established several consumer healthcare brands in antacid powders (Gas-O-Fast), vitamin and mineral supplements (Health OK brand) and anti-acne preparations (AcneStar brand) categories, among others.

Also read: IPO fundraising in India drops by half in 2022-23, but third-highest ever recorded

Also read: Mankind Pharma invests in UK-based firm Actimed Therapeutics