Mankind Pharma IPO opens for subscription, GMP rises; should you subscribe to Rs 4500-crore public issue-

Mankind Pharma IPO opens for subscription, GMP rises; should you subscribe to Rs 4500-crore public issue?

Mankind Pharma IPO: Mankind Pharma’s Rs 4,300-crore IPO opened for public subscription today, i.e., Tuesday, April 25, and will close on Thursday, 27 April. The bidding for anchor investors concluded on Monday. Ahead of the public issue, Mankind Pharma shares’ GMP rose to Rs 92 per equity share, 8.5% over the upper end of the share price on offer. The price band for its public issue at Rs 1,026-1,080 per equity share of face value Re 1 each. At the upper end of the price band, the company’s promoters and shareholders seek to raise Rs 4,326.35 crore from the IPO.

The IPO is entirely an offer for sale (OFS) of 40,058,844 equity shares by promoters and other existing shareholders. The company will not receive any proceeds from the issue and the entire amount will go to the shareholders. The shares are likely to get credited on May 8, and list on stock exchanges on May 9, according to reports.

Should you apply for the Mankind Pharma IPO?

ICICI Securities: Subscribe

“Mankind has consistently outperformed the IPM and has seen regular, steady growth. Its brands have enabled them to consistently generate the highest share of drug prescriptions in the IPM over FY18 to FY22. Additionally, they were placed second by market share for MAT December 2022 in its covered markets. Since it is highly focused on India as a geography, it is less likely to witness medium term headwinds such as excessive competition in regulated markets such as US & Europe, currency risks, economic slowdown/ recession that are being faced by the players doing business globally.”

Geojit Financial Services: Subscribe

“At the upper price band of Rs 1,080, MPL is available at a P/E of 30x (FY22), which appears reasonably priced compared to peers. Considering under-penetration of healthcare services and lower consumer expenditure in healthcare in India, MPL’s focus on chronic therapeutic areas, emphasis on increasing penetration in metro and Class I cities, growth in consumer healthcare business, good financial performance and strong distribution network, we assign a “Subscribe” rating on a long term basis.”

Asit C Mehta Investment Intermediates: Subscribe for long-term

“Mankind benefits from the industry experience and business acumen of their individual Promoters and is driven by the 3 core values of quality, affordability and accessibility. Their professional and experienced management team has been critical in building their brands, growing their operations, and maintaining capital efficiency despite their emphasis on affordable product offerings. At the upper price band of Rs 1,080, stock is available at a valuation of 32.56x of its FY23E EPS of Rs.33.16. Hence, we recommend subscribing to the issue from a long-term perspective.”

Canara Bank Securities: Subscribe for long-term

“Mankind Pharma is India’s 4th largest pharmaceutical company in terms of domestic sales. The company has 98% of the revenues coming from India. The company is gradually increasing its R&D expenditure. The company also has strong market share in the brands of consumer healthcare segment and looking to further expand the segment. It also plans to expand in new chronic therapeutic areas. The company has grown its revenues at a CAGR of 15% for FY20-22 with EBITDA margin in the range of 25-27%. The 9MFY23 was impacted on account of high API prices, one off because of acquisition and rise in hiring of MRs. The company is net debt free with working capital of 45-50 days. The company seems fairly valued in comparison to its peers considering its decent return ratios. We recommend subscribing for the long term.”

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)