Mankind Pharma has reserved not more than 50% shares of the Offer for Qualified Institutional Buyers.
investors were waiting Mankind Pharma IPO For so long that I cannot live without saying…’Look he’s come (English translation – it’s finally here).
Yes, the wait is finally over as the IPO of one of the biggest pharma company is finally here.
In September 2022, the pharma company filed its papers with the market regulator and since then, it was one of the most awaited IPO to watch in 2023,
2023 has not been an easy year for the Indian stock markets. The troubles began when the Adani-Hindenburg story came to the fore in January 2023, followed by the global banking crisis in the US and now the bleak prospects of IT companies.
As a result, many companies were hesitant to present their offers. All this could change with the IPO of Mankind Pharma.
Remember Tata Technologies IPO It is also expected to open in the next few months.
With that out of context, let’s take a look at the key details of the Mankind Pharma IPO.
Digit Size: Issuance of 40.1 million (M) shares
Type: offer for sale
Face value: Rs 1 per equity share
Price Band: The company has fixed its price band from Rs 1,026 to Rs 1,080.
The company has reserved not more than 50% of the shares of the Offer for Qualified Institutional Buyers (QIBs). It has reserved not less than 15% for non-institutional buyers (HNIs). Hence not less than 35% of the shares are available for retail individual investors.
Here are five key details of the IPO.
#1 About the Company
Mankind Pharma is an Indian multinational pharma company based in Delhi. The company’s therapeutic areas range from antibiotics to gastrointestinal, cardiovascular, dermal and erectile dysfunction drugs.
It has one of the largest distribution network of medical representatives in the Indian pharmaceutical market. More than 80% of doctors in India prescribe its formulations and to be ranked 4th in terms of domestic sales during FY2022.
#2 Financial Status
During the pandemic, pharma company revenues were hit, which should come as a surprise as pharma stocks soared and were the biggest beneficiaries of the Covid-19 rally. However, on a compound annual growth rate (CAGR) basis, its sales have grown by 12.2% over the last five years.
Despite incurring high expenses, the company has been able to maintain high profit margins. The company’s net profit margin took a hit despite a 25% increase in total revenue in FY22.
#3 Peer Comparison
Sun Pharma, Cipla, Zydus Lifesciences, Torrent Pharma, Alkem Laboratories, JB Chemicals & Pharmaceuticals, Eris Lifesciences, Ipca Laboratories, Abbott India, Dabur India, Procter & Gamble Health and Zydus Wellness, according to the company’s Red Herring Prospectus (RHP). Listed are colleagues.
#4 Arguments in favor of business
- The company is in a very niche segment with strong visibility in the API, Formulations and Consumer Health segments. The strong profit margin for the company comes from its near dominance of niche segments in the domestic market.
- It is a well established and growing consumer healthcare franchise. It has a strong brand reputation. The company’s iconic brands such as Manforce and Prega News are hugely popular in India and are likely to act as a bridge.
- It has a diversified portfolio of products across key therapeutic areas. In terms of domestic sales (in FY2022), it is among the 10 largest companies across 10 core therapeutic areas.
- The Product Linked Incentive (PLI) scheme will boost the growth of the company to promote domestic manufacturing of critical key starting materials, pharmaceutical intermediates and APIs.
#5 Risk Factors
- biggest problem for investors pharma companies There are strict rules. All pharma companies are subject to extensive government regulations which are also subject to change. If Mankind Pharma fails to comply with applicable regulations set by governments and relevant regulatory agencies, its business, financial condition, cash flows and results of operations will be adversely affected.
- It is a research and development (R&D) intensive industry. Any disruption, slowdown or shutdown in its manufacturing or R&D operations can adversely affect the business.
- Any failure to maintain and enhance its brand, product image or reputation, or damage of any kind, could adversely affect the market recognition and trust of the Company’s products.
- The availability of counterfeit drugs, such as those marketed by others as products of Mankind, can have a negative impact on goodwill and results of operations.
in conclusion
So far, 2023 has proved to be a difficult year. Adani group shares were skyrocketing even before the halving because of a report released by Hindenburg Research. Banking stocks also suffered similar losses.
In 2022, the Nifty Bank index hit multiple lifetime highs, but Indian banking stocks also suffered due to the global banking crisis. It would be safe to say that 2023 has been a year of windfalls for the stock markets so far.
In the IPO of Mankind Pharma, the company is undoubtedly a dominant force in its category. A large market share also indicates that the company is in the maturity phase and the growth phase may be over.
However, the pharma sector is a fast-growing sector, with new innovative drugs and healthcare products coming out from time to time.
The company is also subject to stringent regulations which have a profound impact on the overall performance of the company.
Investors should prepare their own list of pros and cons before making any investment decision.
Happy Investing!
Disclaimer: This article is for information purposes only. This is not a stock recommendation and should not be treated as such.
This article is syndicated equitymaster.com
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)