Mankind Pharma to List on NSE, BSE on Tuesday: Mankind Pharma’s initial public offering (IPO) was up for public subscription during April 25-27 and got a good response with an overall subscription at 15.32 times. The company’s listing is scheduled for tomorrow, Tuesday, May 09, 2023.
Mankind Pharma IPO: Basic Details
Mankind Pharma 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.
It has established several differentiated brands in condoms, pregnancy detection, emergency contraceptives, antacid powders, vitamin and mineral supplements, and anti-acne preparation categories.
It has a pan-India marketing presence and operates 25 manufacturing facilities across the country. As of December 2022, the company had a team of over 600 scientists and a dedicated in-house R&D centre with four units at IMT Manesar, Gurugram (Haryana) and Thane (Maharashtra).
The IPO was entirely an offer for sale (OFS) of 40.06 million equity shares by promoters and other existing shareholders. Its price band was fixed at Rs 1,026-1,080 per share. In the Rs 4,326-crore IPO, a bidder bid for a minimum of one lot and maximum of 13 lots. A lot had Mankind Pharma’s 13 shares.
Mankind’s FY22 revenue grew 25 per cent, volume-driven (17ppts), price hikes (4 per cent ppts) and launches (4ppts), while 9M FY23 growth was 9 per cent. Lower GMs and high costs led to a 23 per cent EBITDA margin in 9M FY23 (FY22: 25.6 per cent). The 9M FY23 EPS slid 20 per cent y/y to Rs 25 (FY22: Rs 36). FCF was Rs 6.3 billion in 9M FY23 (vs a negative Rs 14.2 billion in FY22 due to acquisitions).
Subscription Status
Mankind Pharma is the biggest IPO of the current financial year. The company has raised Rs 4326.35 crore through this IPO. This IPO got tremendous response from the investors. The IPO was subscribed more than 15 times. Out of this, the quota prescribed for Qualified Institutions was maximum subscribed 49.16 times, Non- Institutional Buyers’ quota 3.80 times and Retail Investors’ quota 0.92 times.
On the company’s IPO price, analysts at brokerage firm Anand Rathi have said, “At the high (Rs 1,080) of the issue price band, the stock is valued at about 30x FY22 EPS of Rs 36. Pharma companies quote at an average P/E of 25x/22x FY24e/FY25e. We expect the company’s strong set of brands, focused approach to its chronic portfolio via recent acquisitions, launches and differentiated pipeline products to be key positives. However, risks are addition of NLEM lists, rise in raw material prices.”
“We expect the issue to open 8-10% higher on the listing day,” said Prathamesh Masdekar, research analyst, Stoxbox.
Considering the expensive valuations of the stock versus peers, Masdekar advises investors who were allotted in the IPO to book profits on the listing day.
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