Mankind Pharma eyes IPO, Capital International to exit

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Leading pharmaceutical player Mankind Pharma plans to list itself in the next two years, said a report by Mint business daily, citing company CEO Rajeev Juneja. Mankind Pharma IPO will offer an exit route to private equity investor Capital International which invested in the company in two tranches starting 2015.

“They (PE funds) have a time bar, and they want their returns…We have a very good relationship with them, but they have a time frame to exit,” the report quoted Juneja as saying. The executive added that the exact timing of Mankind Pharma IPO will be finalized based on the sentiments in the secondary market.

Capital International entered the pharma company by acquiring an 11% stake in 2015 from ChrysCapital for USD214 million. Fast forward three years, ChrysCapital made a return to the company and picked up a 10% stake for about USD350 million, valuing Mankind Pharma at nearly USD3.5 billion (INR23,000 crore). As part of the funding round, ChrysCapital was joined by GIC of Singapore and CPPIB of Canada.

Currently, promoters own 79% stake in the company and according to Juneja, there is no interest among promoters to bring this down. This is understandable since Mankind Pharma is in growth phase. Juneja added that the company’s revenues stood at INR4,900 crore in FY2019 but are likely to grow to INR5,600 in the current year and to INR6,500 crore in FY2021.

Mankind Pharma IPO: Largest unlisted player

According to industry estimates, Mankind is currently the fifth-largest pharmaceutical company in India. It has a portfolio of popular brands in categories such as contraceptives, pain relief, anti-bacterial, and dermatology and manufactures over 150 drugs in the essential medicines category. The company owns over 10 popular OTC brands such as Manforce, PregaNews, Unwanted 21 Days, Gas-O-Fast, and RingOut.

According to its website, Mankind Pharma operates 21 state-of-the-art manufacturing facilities in India and is also present in 34 overseas destinations across Asia, Africa, South-East Asia and Gulf countries. The company claims to have begun operations in the markets of Commonwealth Independent States, Uzbekistan and Tajikistan. As of now, the US market isn’t a big destination for the company with revenues of just INR100 crore in FY2019. However, the company plans to increase it to INR500-600 crore in the next two years. The last pharma IPO in India was of Eris Lifesciences in June 2017 and although the company had muted listing, it recovered to end a full year of listing with robust gains of 13.6%. On the other hand, hospitals and diagnostics players have been regular on the IPO street with public offers from Shalby, Aster DM Healthcare and Metropolis Healthcare in the last two years.

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