Mankind Pharma Shares List at 20.4% Premium Today. Should Investors Buy, Sell or Hold?

Mankind Pharma to List on NSE, BSE Today: Mankind Pharma shares start their secondary market journey at Rs 1,300 apiece on BSE and NSE each — a premium of 20.4 per cent over the upper end of its issue price band. Mankind Pharma’s initial public offering (IPO) was up for public subscription during April 25-27 and got a good response with an overall subscription at 15.32 times. The company’s listing is scheduled for tomorrow, Tuesday, May 09, 2023.

Mankind Pharma IPO: Basic Details

Mankind Pharma is engaged in developing, manufacturing, and marketing a diverse range of pharmaceutical formulations across various acute and chronic therapeutic areas, as well as several consumer healthcare products.

It has established several differentiated brands in condoms, pregnancy detection, emergency contraceptives, antacid powders, vitamin and mineral supplements, and anti-acne preparation categories.

The IPO was entirely an offer for sale (OFS) of 40.06 million equity shares by promoters and other existing shareholders. Its price band was fixed at Rs 1,026-1,080 per share. In the Rs 4,326-crore IPO, a bidder bid for a minimum of one lot and maximum of 13 lots. A lot had Mankind Pharma’s 13 shares.

Ahead of Mankind Pharma’s listing today, global brokerage Macquarie came out with an initiation report on the stock with an outperform rating and a target of Rs 1,400 apiece.

Macquarie noted that Mankind has a net cash of about Rs 280 crore as of December 2022 with strong cash flow generation. FY22 ROIC of 30 per cent and ROE of 26 per cent fare much better than its domestic peers (average ROIC of 17 per cent, ROE 16 per cent) and are in line with MNC peers such as Abbott, Pfizer, and GSK India.

That said, capacity utilisation remains low, suggesting room for improvement, Macquarie said.

“At the upper band of its IPO price of Rs 1,080, the stock is valued at 19 times PER on our FY25e EPS of Rs 56. Our target price of Rs 1,400 is based on 25 times FY25e PER, at a 20 per cent discount to MNC peers to account for innovative product launch optionality with MNC companies. We initiate coverage with an Outperform rating,” the brokerage said.