The Rs 4,326 crore initial share sale of Mankind Pharma was successfully completed on the final day of tendering on Thursday.
Non-institutional investors (NII) and qualified institutional buyers (QIB) performed the lion’s share of the heavy labor to date on Day 3 of the IPO’s subscription period. NII was subscribed to 1.34 times while QIB was subscribed to 5.68 times. The response from retail investors was muted, with only 35% of their portion being purchased.
The IPO, which consists entirely of an offer for sale (OFS), will end today. The price range is Rs 1024 to Rs 1080, and investors are permitted to offer for 13 shares per lot.
Approximately nine brokerages have issued “subscribe” recommendations on the issue, with some recognizing its long-term potential. According to analysts, development opportunities outweigh concerns regarding expensive valuations.
Market sources said the company’s shares’ unlisted market premium has dropped to Rs 65 from Rs 90 the day before.
Mankind Pharma has raised approximately Rs 1,297 crore prior to its IPO by allotting 1,2 million equity shares to 77 anchor investors.
Goldman Sachs, Canada Pension Plan, the Government of Singapore, and Fidelity Investment Trust, among other prominent foreign and domestic institutions, participated in the anchor round, which was conducted at a price of Rs 1,080 per share.
As of December 2022, Mankind Pharma is the fourth largest Indian pharmaceutical company by domestic sales and the third largest by sales volume for moving annual total.
It has a nationwide marketing presence and 25 manufacturing facilities. As of December 2022, the corporation employed over 600 scientists and had a dedicated R&D center with four units located in IMT Manesar, Gurugram, and Thane.
At the upper end of the price range, Mankind Pharma shares are valued at 30 times FY22 EPS. According to Sharekhan, the average P/E ratio for pharmaceutical companies is 25x/22x for FY24e/FY25E.
This offering is book-run by Kotak Mahindra Capital Company, Axis Capital, IIFL Securities, Jefferies India, and JP Morgan India.
Domestic sales account for 97.60% of Mankind Pharma’s total revenue for fiscal year 2022, growing at 1.3 times the rate of the IPM between fiscal year 2020 and December 2022.
On the performance front, total revenue increased by 24.94% YoY from Rs 6,385.38 crores in FY21 to Rs 7,977.58 crores in FY22, while PAT increased by 12.37% YoY from Rs 1,293.03 crores in FY21 to Rs 1,459.96 crores in FY22.
In FY22, its interest coverage ratio will increase to 34.18x. As of March 31, 2022, the company reported an EBITDA margin of 25.75%, EPS of Rs 35.78, ROCE of 25.50%, and ROE of 25.99%.
“After the financial performance of the past year, there is ample room for expansion. Palka Arora Chopra, Senior Vice President at Mastertrust, stated that investors can contemplate investing in this IPO with a long-term horizon.