One of India’s biggest unlisted pharmaceutical firms, ChrysCapital-backed Mankind Pharma, the maker of top selling condom brand Manforce Condoms, Kaloree 1 and Prega News, has initiated preliminary discussions with investment bankers to launch a mega IPO in 2022, multiple industry sources in the know told Moneycontrol.
“Pitches were held for the proposed IPO of Mankind Pharma earlier this week. These are early days and the listing is aimed at facilitating a partial exit for its investors who are looking at returns within a time frame,” said one of the persons cited above.
Other than ChrysCapital, the drugmaker is backed by the likes of Capital International and Singapore’s GIC. In 2015, Capital International had purchased an 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.
A second person said that the valuation of Mankind Pharma could potentially range between $8 billion and $10 billion.
“It’s a cash-rich firm and it's likely that the IPO may chiefly consist of an OFS or offer for sale component by the investors."
A third person confirmed the above valuation range and added that the fast-growing firm had reached the desired size and scale for a listing. He said the syndicate of i-bankers for the deal could be finalised in April.
If one were to consider a minimum dilution of a 10 percent stake, then the size of the proposed IPO could range between
$800 million and $1 billion, making it one of the biggest ever IPOs in the pharma segment.
The current record in the sector is held by Gland Pharma which launched an $869 million IPO in November 2020.
A fourth person told Moneycontrol that a clutch of as many as 10 to 12 foreign and domestic investment banks had made presentations for the IPO mandate.
“They have a strong OTC business and they have seen the moves made by IPO-bound pharma peers like Bain Capital-backed Emcure Pharma and Macleod Pharma,” this person added.
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.
A fifth person familiar with Mankind Pharma said that when ChrysCapital re-entered the firm in 2018, there would have been discussions on future exit strategies.
“The firm has been trying to expand their OTC products business for better margins and that shift has been accelerated since ChrysCapital came on board. They have built a good number of brands over the years and made them stronger,” this person elaborated.
All the five persons cited above spoke to Moneycontrol on condition of anonymity.
Moneycontrol has sent email queries along with reminders and is awaiting responses from Mankind Pharma, ChrysCapital and GIC. This article will be updated as soon as we hear from them.
MANKIND PHARMA: THE FOOTPRINT AND STATS
The Delhi-based Mankind Pharma was founded by Ramesh Juneja and the firm became a fully integrated pharmaceutical company in 1995. It is present in the categories of prescription medicines, OTC products and veterinary medicine.
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.
A month back, the firm had acquired the formulations brands of listed player Panacea Biotec in India and Nepal for Rs 1,872 crore to explore new therapeutic areas
In February, Mumbai-based Macleods Pharmaceuticals filed papers with SEBI for its IPO.
In August 2021, Bain Capital-backed Emcure Pharma had filed papers with the regulator for a proposed Rs 4,500–Rs 5,000-crore IPO.
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