India’s leading pregnancy test kit maker, Mankind, is planning its largest-ever IPO this year

BENGALURU, April 19 (Reuters) – Indian pharmaceutical company Mankind Pharma Ltd is targeting a valuation of 432.64 billion rupees ($5.27 billion), at the top end of a price range it could expect for its initial public offering (IPO) on Wednesday has set the largest domestic stock launch so far this year.

The company, which makes the Prega News home pregnancy test kit, which has an 80% market share in the country, and Manforce condoms, set the price range at Rs 1,026 to Rs 1,080 per share.

The company’s IPO will consist of nearly 40.1 million shares in an offering from existing shareholders, according to a prospectus, meaning the proceeds would go to the selling shareholders alone. The bid size is 43.26 billion rupees.

“The Ask valuation is a bit expensive at the industry average of earnings before interest, taxes, depreciation and amortization, or EBITDA multiples of what Indian pharmaceutical companies trade at,” said Prashanth Tapse, research analyst at Mehta Equities, by comparison plus companies like Cipla Ltd (CIPL.NS) and Zydus Lifesciences Ltd (ZYDU.NS) .

Tapse said Mankind commands a 19-20x EBITDA ask valuation, while industry average pharmaceutical companies trade at 15-16x EBITDA.

Mankind Pharma’s IPO comes at a time when volatile markets and global macroeconomic challenges have derailed or delayed various listing plans in India.

Earlier this year, personal care startup Mamaearth shelved its IPO, while clothing retailer Fabindia and jeweler Joyalukkas pulled their plans.

Mankind, which also manufactures acute and chronic therapeutics, reported a profit of Rs.9.96 billion for the nine months ended December 31, compared to Rs.12.43 billion a year earlier, while its operating income rose nearly 11% over the same period.

The company submitted draft papers for the IPO in September last year, with Kotak Mahindra Capital, Axis Capital and JP Morgan India among the lead managers.

The offer date for anchor investors is set for April 24, while retail investors can submit an offer from April 25 to April 27.

Mankind, India’s fourth largest pharmaceutical company by domestic sales, is scheduled to start trading on May 9.

($1 = 82.1170 Indian rupees)

Reporting by Rama Venkat in Bengaluru; Edited by Nivedita Bhattacharjee

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