Marking the biggest domestic market listing so far this year, shares of Mankind Pharma debuted at a premium of 20.37% at ₹ 1,300.00 apiece on the bourses, against an issue price of ₹ 1080.00. Its shares continued to climb and reached a high of ₹ 1414.00 apiece, up 30.93%.
The stellar listing was expected, particularly after it received an overwhelming response as the issue was subscribed 15.32 times. The QIB portion was subscribed 49 times, HNI portion 3.8 times, however, retail investors did not show much interest in the IPO.
The pharmaceutical company IPO was entirely an offer-for-sale where promoters and existing shareholders offloaded 40,058,844 equity shares with a face value of ₹ 1.
Post listing, brokerage firm Macquarie initiated coverage on the stock. It believes that the company’s net profit could double in the next three years driven by continued sales outperformance, relative to the Indian pharma market, mix shift towards chronic therapies and unlocking of meaningful operating leverage as salesforce productivity improves.
It added that Mankind has net cash of about ₹ 280 crores as of December 2022 with strong cash flow generation. As per data for FY22, it has a return on capital employed of 30% and a return on equity of 26%, which is much better than its peers and is in line with the likes of Abbott, Pfizer and GSK India.
Meanwhile, Hemang Jani, Head of Equity Strategy at Motilal Oswal, said that the primary market saw an IPO after a long gap, therefore the interest was high. He added that the healthcare sector has been a laggard over the past year, but started seeing traction over the last two months as the monthly pharma data showed improvement.
Mankind Pharma is the fourth-largest pharmaceutical company in terms of domestic sales and the third-largest in terms of sales volume. It derives a majority of its revenue (98%) from the domestic market. It has a pan-India presence and operates 25 manufacturing facilities and a team of over 600 scientists and a dedicated in-house R&D centre.
The debutant’s business segments include anti-infectives, cardiovascular, gastrointestinal, anti-diabetic, well-being and respiratory brands, as well as chronic therapeutic and consumer healthcare products.
Written by Simran Bafna
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
