Mankind Pharma shares snap 4-session losing streak on fundraising, OTC biz transfer

Shares of homegrown Mankind Pharma gained over 1% in intraday trade on Tuesday, after falling nearly 8% in the past four sessions, as sentiments were lifted by a slew of positive developments. The largecap pharma witnessed a surge in buying after its board approved a fundraising plan of up to ₹10,000 crore and the transfer of its Over-the-Counter (OTC) business undertaking to its wholly owned subsidiary, Mankind Consumer Products (MCPPL).

Snapping four sessions losing streak, Mankind Pharma shares rose as much as 1.3% to ₹2,554.95 on the BSE. Early today, the pharma heavyweight opened higher at ₹2,549.45 after ending 2.68% lower at ₹2,521.55.

At the time of reporting, Mankind shares were trading at ₹2,547.40, up 1%, with a market capitalisation of ₹1.02 lakh crore. The stock touched its 52-week high of ₹2,780 on September 24, 2024, and a 52-week low of ₹1,685 on November 1, 2023. In the last one year, the counter has risen 41%, while it added 28% in the calendar year 2024 and 10% in the past six months.

In an exchange filing last evening, Delhi-based Mankind Pharma said that its board approved a proposal to raise up to ₹10,000 crore via issuance of non-convertible debentures and commercial papers.  The company says it will issue 5 lakh rupee-denominated secured, rated and listed NCDs with a nominal value of ₹1 lakh each totalling ₹5,000 crore. The company will also issue listed and rated commercial paper having a face value worth ₹5,000 crore.

"Up to 500,000 INR denominated, secured, rated and listed non-convertible debentures with nominal value of INR 100,000 each, aggregating to not more than INR 50,000,000,000 in 3-4 distinct series with maturities of up to 48 months; and listed and rated commercial paper having face value as may be decided in accordance with applicable law, for an aggregate financing amount of not exceeding INR 50,000,000,000 (the “CP”), in one or more tranches or series," Mankind Pharma said in a BSE filing.

In a separate release today, the company, which sells condom brand Manforce and pregnancy test kit Prega News, says it executed a business transfer agreement (BTA) to transfer its Over-the-Counter (OTC) business undertaking to MCPPL on a slump sale basis. Mankind Pharma’s consumer products portfolio includes several trusted brands Manforce, HealthOK, Prega News, AcneStar, Unwanted and Gas-O-Fast across categories such as wellness, hygiene, and personal care products.

The move is part of Mankind Pharma’s broader strategy to enhance its focus on the consumer business, which currently contributes 7% to the company's overall revenue.

In Q1 FY25, the OTC business reported revenues of ₹206 crore, with an EBITDA margin of 19.5%. For FY24, it achieved a total revenue of ₹706 crore, maintaining a healthy EBITDA margin of 19.9%.

“By subsidiarisation of the OTC business into a wholly owned subsidiary, Mankind Pharma aims to better capitalise on the potential of this business segment, recognising its unique business needs. This dedicated focus will enable in attracting the of specialised talent, tailored strategies around consumer needs and differentiated distribution channels. This move will allow the OTC business to thrive independently and will drive it to higher growth levels,” it says in a release.

As per the company, the transfer of the OTC business, will be undertaken as a going concern, meaning the business will continue to operate without interruption. As part of the slump sale, the transaction has been completed for a lump sum consideration.

“This decision has been made because the consumer business was previously managed with a concoction of pharmaceutical and consumer-focused strategies, which we believe can be better streamlined with a more tailored approach. We aim to differentiate the consumer business, with select leadership, specialised talent, and dedicated resources to help it thrive,” says Rajeev Juneja, Vice-Chairman & Managing Director of Mankind Pharma.

The release notes that the company aims to drive innovation in healthcare by introducing products that cater to evolving consumer needs. Notable launches include Rapid News focusing on health concerns including Dengue, UTI, Menopause and Ova News, with a particular focus on DIY diagnostic tests and advancing the women's health agenda. 

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