Mankind Pharma shares jump 32% on listing day

The initial public offer got subscribed 15.32 times on the last day of the offer. The category for Qualified Institutional Buyers (QIBs) got subscribed 49.16 times, the Retail Individual Investors (RIIs) portion received 0.92 times subscription and non-institutional investors 3.8 times.

Kotak Mahindra Capital Company Limited, Axis Capital Limited, IIFL Securities Limited, Jefferies India Private Limited, and J.P. Morgan India Private Limited were the lead managers for the issue.

The IPO is entirely an offer for sale or OFS which means that the company will not receive any proceeds from the issue. Post the listing, the promoters will hold 78 percent stake, while private equities will hold 12 percent.

Ahead of the IPO, Mankind Pharma raised Rs 1,298 crore from anchor investors, prior to the launch of its initial share sale scheduled for subscription starting from April 25.

Out of the 77 anchor investors, 44 are domestic mutual fund houses that have participated in the anchor round via different schemes. Notable domestic fund houses that have taken part include HDFC Mutual Fund, SBI Mutual Fund, and ICICI Pru MF, among others.

"Mankind Pharma received good response from its anchor clients given its domestic focused business with strong brand recall in both chronic and consumer healthcare segment. Given its healthy financial track record, domestic focus and extensive network, Mankind is likely to continue doing well," Hemang Jani of Motilal Oswal said.

Mankind Pharma, the fourth largest pharma company in terms of domestic sales, is the manufacturer of popular brands like Manforce, PregaNews, and Unwanted 72, which have gained immense popularity among consumers. The company's 98 percent sales are from India. Pharma accounts for 90 percent of the total sales, while consumer health accounts for 9-10 percent sales.

Tier 2-4 cities and rural account for 47 percent of sales, while 37 percent for industry. The company's key USP is affordability and accessibility. The products are priced 15-20 percent cheaper.

The company reported a compound annual growth rate of 16 percent in FY20 to FY22 as compared to a Indian pharma growth of 11 percent.

Mankind Pharma Chairman Ramesh Juneja told CNBC-TV18 that the  company is working towards launch of new products to ensure growth going forward. Rajeev Juneja, VC and MD, said, "We are in a transition mode. Everything happens at its own pace and if you ask me what is a thought process in Mankind, we want to be the most admired company. We want to institutionalize Mankind Pharma."

On EBITDA margin, Rajeev Juneja said,  "If you look at the history, it was always 25 to 27 percent. Still, we are under the obligation of certain regulations... whatever API price were increased, they have settled down and we definitely see going forward good things happening in every sense, whether it's a growth, or whether it's growth on margins."