Mankind Pharma IPO Review – Is the Pharma Giant Worth Investing?

Mankind Pharma is coming up with an IPO that would open for subscription on 25th April and closes on 27th April, 2023. It is the 4th largest pharma company in India. The company has a strong presence in the Indian pharmaceutical market and has been consistently growing its revenue and profits over the years. Should you invest in Mankind Pharma IPO? This article provides Mankind Pharma IPO details, IPO dates, Financials and Review.

Also Read: 12 Best Low Cost Index Mutual Funds to invest for long term

About Mankind Pharma Limited

Mankind Pharma Limited is India’s fourth-largest pharmaceutical company in terms of domestic sales and third largest in terms of sales volume for MAT December 2022.

The company develops, manufactures, and markets a diverse range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as consumer healthcare products.

Mankind Pharma Limited’s revenue from operations in India contributed to 97.60% of their total revenue from operations for the Financial Year 2022, which is one of the highest among their peers identified by IQVIA.

The company has primarily grown organically and is the youngest company among the five largest pharmaceutical companies in India, in terms of domestic sales in 2022.

Mankind Pharma Limited operates at the intersection of the Indian pharmaceutical formulations and consumer healthcare sectors with the aim of providing quality products at affordable prices.

The company has an established track record of building and scaling brands in-house, with 36 brands in their pharmaceutical business that have each achieved over ₹500. 00 million in domestic sales for MAT December 2022.

Mankind Pharma Limited has one of the largest distribution networks of medical representatives in the Indian pharmaceutical market and over 80% of doctors in India prescribed their formulations for MAT December 2022.

The company’s brands have enabled them to consistently generate the highest share of drug prescriptions in the Indian pharmaceutical market over the Financial Years 2018 to 2022.

Mankind Pharma Limited invests heavily in research and development to develop new and improved products that can help to address unmet medical needs.

The company is committed to providing affordable and accessible healthcare solutions to people around the world.

Mankind Pharma IPO Issue Details

Here are the IPO issue details.

IPO Opening Date 25-Apr-23
IPO Closing Date 27-Apr-23
IPO Listing Date 08-May-23
Issue Type Book Built Issue IPO
Face Value Rs 1 per equity share
IPO Price band Rs 1026 to Rs 1080 per equity share
Lot Size 13 Shares
Min Order Quantity 13 Shares
Listing at BSE and NSE
Total Issue Size (Entirely OFS) Rs. 4326.36 Crores
QIB shares offered Not less than 50% of the offer
NII/HNI shares offered Not more than 15% of the offer
Retail shares offered Not more than 35% of the offer

Mankind Pharma IPO – Company Financials

Financial Year ending / Period ending (Amt in Crores)
Particulars FY20 FY21 FY22 9 Months ending Dec-23
Total Assets 5,073.3 6,372.6 9,147.7 9,273.8
Revenues 5,975.7 6,385.4 7,977.6 6,777.8
Profit After Tax 1,056.2 1,293.0 1,453.0 1,016.0
Profit % 17.67% 20.25% 18.21% 14.99%

Mankind Pharma IPO Valuations

Its IPO price band is Rs 1,026 to Rs 1,080.

If we consider last year FY22 EPS of Rs 35.78, P/E ratio works out to be 30x.

If we consider last 3 years weighted average EPS of Rs 32.71, P/E ratio works out to be 33x.

Even if we consider 9 months ended Dec-22 EPS and annualize it, P/E ratio works out to be 33x.

The listed peers like Sun Pharma is trading at P/E 72x (Highest) and Zydus Life Science trading at P/E of 11x (Lowest) and industry average P/E is 40x. Hence, the IPO Price band at P/E of 30x to 33x is reasonably priced.

Positive Factors to invest in Mankind Pharma IPO

Here are 5 positive factors that could make a Mankind Pharma Limited an attractive investment opportunity:

Strong market position: Mankind Pharma is the fourth-largest pharmaceutical company in India in terms of domestic sales, and its revenue from operations in India contributed to 97.60% of its total revenue from operations in FY2022. The company has an established presence in the Indian market with an extensive distribution network, which could help it maintain its market position.

Focus on affordability: Mankind Pharma’s focus on providing quality products at affordable prices has been a key factor in its success. The company’s brands have consistently achieved over ₹500 million in domestic sales, and it has a track record of building and scaling brands in-house.

Diversified portfolio: The company’s diverse portfolio of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products, could provide a cushion against any downturns in specific therapeutic areas.

Strong financials: Mankind Pharma has shown strong revenue and profit growth over the years. The company’s return on net worth (RoNW) for FY2022 was 23.29%, which indicates the efficient utilization of its shareholders’ funds.

Youngest among larger peers: Mankind Pharma is the youngest company among the five largest pharmaceutical companies in India in terms of domestic sales in 2022. This suggests that the company has room to grow and gain market share, which could potentially lead to higher returns for investors.

Strong R&D capabilities: Mankind Pharma has a dedicated research and development team and has been investing heavily in R&D to develop new drugs and formulations. This could help the company stay competitive in the market and create new revenue streams.

Risk or Negative factors of investing in Mankind Pharma IPO

Here are some potential negative factors to consider before investing in Mankind Pharma.

High dependence on the domestic market: Mankind Pharma primarily focus on the domestic market, with over 97% of its revenue coming from operations in India. This could limit the company’s growth potential if the Indian market experiences, challenges or if the company faces stiff competition from other domestic players.

Regulatory risks: Like all pharmaceutical companies, Mankind Pharma is subject to regulatory approvals for its products. Delays or rejections by regulatory bodies can result in significant delays in product launches and revenue generation.

Intense competition: The Indian pharmaceutical market is highly competitive, with several well-established players and new entrants. Mankind Pharma competes with large companies such as Sun Pharmaceuticals, Cipla, and Alkem Laboratories, among others, which could impact its market share and revenue growth.

Limited international presence: While Mankind Pharma has recently expanded its operations in international markets, it still has a limited presence compared to some of its peers. This could limit its ability to diversify its revenue streams and increase its exposure to global opportunities.

Higher debt levels: Mankind Pharma has a debt-to-equity ratio of 1.03 as of March 2022, which is higher than some of its peers. While debt can be used to fund growth opportunities, higher debt levels also increase the company’s financial risk and interest expenses.

Dependent on a limited number of products: Mankind Pharma’s revenue is concentrated in a limited number of products, which could make it vulnerable to product-specific risks. Any adverse regulatory actions, manufacturing issues, or other product-related challenges could significantly impact the company’s revenue and profitability

Investors can read complete risk factors from RHP of the company.

What is Mankind Pharma IPO GMP today?

According to market observers, Mankind Pharma IPO GMP shares are available at a premium of Rs 90 per share in grey market today.

Also read: 5 Mutual Funds with Highest 10 Year Returns up to 27%

Is Mankind Pharma IPO good or bad for investment?

In conclusion, investing in Mankind Pharma has its positive and negative aspects.

Some positive factors include a unique product portfolio, a strong domestic market position, growing revenue and profits, an established brand presence, and an extensive distribution network. The IPO Price also reasonably priced.

However, some negative factors include high dependence on the domestic market, regulatory risks, limited international presence, and intense competition.

High risk investors can invest in this IPO with medium to long term perspective.

Source: Mankind Pharma IPO Review is based on RHP

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Suresh KP

One comment

  1. Mankind caters mostly to generic medicines and low cost ethical medicines.So far so
    good.R&D in pharma in India is very limited,so most of the large companies only market
    there products and outsource manufacturing.You can read this things on label of product.It’s not a secret.
    Margins are low due to competitors

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