The initial share sale of Mankind Pharma, one of the largest pharma firms in the country, opened for public subscription on Tuesday. The issue will be available for the public to bid till April 27. At Rs 4,326 crore, this will be the first biggest IPO in terms of the issue size.
The company has mobilised Rs 1,297.9 crore from anchor investors ahead of its initial public offering (IPO). As many as 77 investors have received shares via anchor book.
GMP
According to market observers, Mankind Pharma shares are commanding a premium (GMP) of Rs 90 in the grey market today. The shares of the company are expected to list on the leading stock exchanges BSE and NSE on May 9, 2023.
Price band, lot size
The drug maker has fixed the price band in the range of Rs 1,026 to Rs 1,080 per share. Investors can bid for 13 shares in one lot and in multiples thereof.
As one lot will have 13 company shares, minimum investment limit required for a retail investor to apply for Mankind Pharma IPO is Rs 14,040 (Rs 1080 x 13).
At the upper end of the price band, the Delhi-based drug maker's issue size will be Rs 4,110-4,326 crore, seeking a valuation of Rs 43,000 crore.
What should investors do?
Mankind Pharma benefits from its strong foothold in domestic branded formulations with emphasis on affordable product offerings. "At the upper price band, it is valued at 32.5 times P/E on annualised FY23E Earnings per share (EPS) of Rs 33.2," said domestic brokerage ICICI Direct Research.
The brokerage has assigned a 'subscribe' rating on the back of opportunities from its newer acquired products and its plan to backward integrate in its power brands, structural preference for domestic branded formulations among broader healthcare themes.
On mankind Pharma IPO review, Aditya Birla Capital stated: "At the upper price band, MPL is available at PE of 33 times its expected FY23 EPS. As at FY22, the D/E stands at 0.09x while its Net Working Capital Cycle was at 49 days. We believe that MPL’s market leadership and brand recognition coupled with Management’s bet on the recent acquisition of Panacea Biotech’s formulations may provide a huge growth opportunity for the company. We have a SUBSCRIBE recommendation to this issue."
"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," said analysts at Geojit.
The company is planning to raise Rs 4,326.36 crore through its IPO which comprises only an offer for sale by promoters and investors.
The company will not receive any money from this public issue, and all the funds will to go to selling shareholders.
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