Is Mankindss Pharma IPO worth a subscription? Here's what brokerages

The Rs 4,326-crore initial public offering (IPO) of Mankind Pharma will open for subscription from Tuesday, April 25. The price band is set in the range of Rs 1,026-1,080 per share. The offer-for-sale (OFS) portion consists of 40.1 million shares. 

Mankind Pharma is India's fourth largest pharma company in terms of domestic sales and third largest in terms of sales volume on a moving annual turnover (MAT) basis, as of December 2022. The company develops, manufactures, and markets a diverse range of acute-to-chronic therapies. Some of the well-known consumer healthcare products include Manforce, Prega News, Unwanted 72, Gas-o-Fast, Health OK, and AcneStar.

In the grey markets, shares of Mankind Pharma enjoyed a premium of Rs 90, which translated to a likely listing price of Rs 1,170 per share on the upper price band. Upon listing, the company will join peers like Abbott India, GlaxoSmithKline Pharmaceuticals, Eris Lifesciences, Pfizer, among others.

Issue-wise, around 50 per cent of the IPO is reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors (NIIs), and the remaining 35 per cent for retail. 

On the financial front, revenue from operations rose 10.5 per cent year-on-year (YoY) to Rs 6,696 crore in the October-December quarter of FY23 (Q3FY23), while profit declined 19.3 per cent YoY to Rs 1,016 crore in Q3FY23.

Key risks: Pricing pressure persists on certain drugs as countries seek to expand patient access to affordable drugs, while keeping budgets in check. In addition, rising input costs, and addition of a national list of essential medicines (NLEM).