Mankind Pharma IPO to open on April 25, issue price fixed: What GMP signals?

The Mankind Pharma IPO is a main-board offering of 40,058,844 equity shares with a face value of ₹1 totalling up to ₹4,326.36 crore. The initial public offering (IPO) will begin on April 25, 2023, and end on April 27, 2023. The issue is priced between ₹1026 to ₹1080 per share.

The anchor investor bidding date is April 24, 2023, and 13 equity shares are the least number for which a bid may be placed, and after that, bids can be made in multiples of 13. 

Kotak Mahindra Capital Company Limited, Axis Capital Limited, IIFL Securities Limited, Jefferies India Private Limited, and J.P. Morgan India Private Limited are lead managers to Mankind Pharma IPO and the equity shares offered through Red Herring Prospectus are proposed to be listed on both BSE and NSE.

13 shares make up one lot of the IPO and the minimum investment required for a retail investor to apply for one lot is ₹13,338. An investor may submit applications for up to 14 lots for Mankind Pharma IPO.

According to the red herring prospectus (RHP), the Mankind Pharma IPO is solely an offer for sale (OFS) of 40,058,844 equity shares by the promoters and other existing shareholders. Promoters Ramesh Juneja, Rajeev Juneja, and Sheetal Arora are the part of OFS. The OFS will also include participation from Cairnhill CIPEF, Cairnhill CGPE, Beige Limited, and Link Investment Trust.

The Mankind Pharma Day-wise IPO GMP trend began on May 15, 2023, at a price of ₹82. Since then, it has fluctuated between ₹96 and ₹75 throughout the course of the previous 5 days, with today's GMP settling at ₹74 per share on April 19, 2023, at 4:35 PM. As per the GMP indication on April 19, 2023, and offered at the price range of Rs. 1080, the expected listing price for the Mankind Pharma IPO is Rs. 1154. Therefore, the GMP of Rs. 74 on a projected upper band pricing of Rs. 1,080 shows a listing premium of a healthy 6.85% for Mankind Pharma Ltd over the listing price. 

Commenting on the pros and cons of Mankind Pharma IPO, Krishna Raghavan, Founder, UnlistedKart said “Mankind Pharma's diverse product offerings and pan-India presence are some of its major strengths. The company's focus on developing and marketing consumer healthcare products has helped it create a strong brand presence in the Indian market. Additionally, the company's in-house R&D center with over 600 scientists showcases its commitment to innovation and product development.”

“However, the company is also exposed to government price controls, which could negatively impact its results of operations. The prices of certain products are restricted by price controls imposed by governments and healthcare providers in India, which may limit the revenue it earns from certain products. The company's business operations are also subject to the pharmaceutical industry's developments in regions such as the US, Bangladesh, Sri Lanka, and Nepal, which are its major markets,” said Krishna Raghavan.

Commenting on whether to subscribe or not, Krishna Raghavan said “Investors should weigh the pros and cons of investing in Mankind Pharma before deciding whether to subscribe to its IPO or not. On one hand, the company's extensive product portfolio and pan-India presence provide a significant advantage in the pharmaceutical industry, while its focus on developing and manufacturing consumer healthcare products diversifies its product offerings. On the other hand, the company is exposed to government price controls, which could negatively affect its results of operations. Additionally, since the IPO is entirely an offer for sale, the company will not receive any net proceeds from the issue.”

“In conclusion, Mankind Pharma's IPO offers investors an opportunity to invest in a company with a strong presence in the pharmaceutical industry and a diverse product portfolio. However, investors should also consider the company's exposure to government price controls and the fact that the IPO is entirely an offer for sale before making a decision to invest,” Krishna Raghavan further added.

Mankind Pharma is a drug manufacturer that develops, manufactures, and markets a wide range of pharmaceutical formulations across various acute and chronic therapeutic areas. It has also established several differentiated brands in consumer healthcare products such as condoms, pregnancy detection, emergency contraceptives, antacid powders, vitamin and mineral supplements, and anti-acne preparation categories. The company has a pan-India marketing presence and operates 25 manufacturing facilities across the country.