Mankind Pharma, one of India’s leading pharmaceutical companies, has initiated a Qualified Institutional Placement (QIP) to raise up to Rs 3,000 crore. This move is part of the company’s strategy to fund its acquisition of Bharat Serums and Vaccines (BSV), a significant deal announced in July 2024.
The QIP was officially launched on December 16, 2024. Mankind Pharma has set a floor price of Rs 2,616.55 per share for the QIP, in accordance with the Securities and Exchange Board of India (SEBI) pricing guidelines. Additionally, the company is offering the option to provide a discount of up to 5% on the floor price for qualified institutional buyers (QIBs). This QIP is a key component of Mankind Pharma’s financing strategy for acquiring Bharat Serums and Vaccines (BSV), a move that aims to strengthen the company’s position in the pharmaceutical industry.
Mankind Pharma has confirmed that the funds raised through the QIP will partly finance the Rs 13,630 crore acquisition of Bharat Serums. Bharat Serums specializes in areas like women’s health, critical care, and assisted reproductive technology. The acquisition is expected to help Mankind Pharma expand its portfolio and diversify its presence in key sectors of the pharmaceutical industry.
In anticipation of the QIP announcement, Mankind Pharma's shares saw a 1.7% gain on December 16, 2024, closing at Rs 2,686 on the National Stock Exchange (NSE). The stock has experienced a 40% increase in value over the past year, which has led to a market capitalization of Rs 1.08 lakh crore. This growth reflects investor confidence in the company’s future prospects and the success of its strategic expansion plans.
In an interview, Rajeev Juneja, Vice Chairman and Managing Director of Mankind Pharma, shared more details about the funding structure for the acquisition. The deal’s total value is approximately Rs 14,000 crore, and the funding will be sourced as follows:
Rs 4,000 crore from the company’s own resources
Rs 3,000 crore through the QIP
Rs 7,000 crore through loans
Juneja also expressed the company’s intention to pay off the loan within three years. This diversified funding approach is aimed at ensuring the smooth completion of the acquisition and minimizing financial risks.
The QIP is being executed in full compliance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the Companies Act, 2013. The company has already adopted its preliminary placement document and application form on December 16, 2024, marking a key step in the QIP process.
Mankind Pharma has enlisted Kotak Mahindra Capital and IIFL Capital as the advisors for the QIP. Their role will be critical in guiding the company through the process, ensuring that all regulatory requirements are met and the offering is successfully executed.
The acquisition of Bharat Serums and Vaccines is a pivotal move for Mankind Pharma. BSV’s expertise in critical therapeutic areas like women's health and critical care will bolster Mankind Pharma’s product offerings. By integrating these specialties into its portfolio, Mankind Pharma aims to solidify its position as a leading player in the pharmaceutical industry.
Conclusion,
Mankind Pharma’s launch of a Rs 3,000 crore Qualified Institutional Placement (QIP) marks a significant step in its strategy to strengthen its position in the pharmaceutical industry. The QIP, designed to partly finance the acquisition of Bharat Serums and Vaccines, aligns with the company’s vision to diversify its portfolio and expand into critical healthcare segments such as women’s health and reproductive technology.
The successful implementation of the QIP, guided by SEBI regulations and supported by key advisors like Kotak Mahindra Capital and IIFL Capital, reflects Mankind Pharma’s commitment to maintaining financial stability and driving growth. As the QIP continues, the market’s positive response underscores investor confidence in the company’s future and its strategic initiatives. With a robust funding plan and a clear roadmap to pay off the debt, Mankind Pharma is poised to navigate the acquisition process with confidence, driving innovation and improving healthcare outcomes for millions across India.