Mankind Pharma Limited IPO Message Board (Page 49)

GMP:- 90-92

Should apply in IPO or not? Why GMP falling?

Sell in grey and then apply

55 59

Mankind 59 Premium
Small Application 600
Small HNI 2000
Big HNI 8500

GMP 65
Bhai premium kya gir raha he

Seller 64/-

3 Caveats Before Considering
the Mankind Pharma IPO
Tue, 25 Apr 2023

Investing millions in quality control.

Hiring global consultants.

Modernisation.

Automation.

You name it and they have done it all.

Owners and shareholders of Indian pharma majors have lost a fortune of stock market wealth over the past decade. And the reasons are not too hard to find.

They may have offered lifesaving products in a country of more than a billion odd people.

Also, they offer cheaper generic drugs to global markets. But the drug makers in India fail to take home enough profits themselves.

When companies in other sectors were wriggling under the pains of Covid-19, most Indian pharma companies basked in the glory of being cheap vaccine and drug suppliers.

But the pandemic was a short-lived honeymoon period for the sector.

In fact, even as markets get excited about the latest pharma IPO in the offing, some caveats are in order.

Now, don't get me wrong...

Mankind Pharma, which begins its initial public offering (IPO) today, has its strengths.

Mankind Pharma is India's fourth largest pharma company in terms of domestic sales, 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 fact, Mankind's 38 brands rank in the top-5 in their therapy categories and clock sales of Rs 1 bn to 3 bn annually.

Mankind Pharma also has a wide distribution network in India. With over 11,000 stockists, and 75 clearing and forwarding agents, the company enjoys an all-India dominance. Its sales are prominent in north, south, and west India.

But like its peers and most domestic pharma companies in India there are certain risks that Mankind Pharma cannot sideline.

Rather, despite all its strengths, Mankind Pharma may find it impossible to go past these risks to fetch premium valuations.

There are 3 reasons for this...

Regulatory Risk
Facing a USFDA scrutiny or getting warning letters from the US drug regulatory literally hangs like a knife over every pharma stock in India.

Companies like Cipla, Lupin, Glenmark, and Sun Pharma once formed part of the BSE 30 and Nifty 50 indices. But no more.

These companies still own some of the buggiest pharma brands. But the constant regulatory interference has taken a huge toll on their capex and production planning.

Not to mention a total embargo on exports until the regulatory concerns are ironed out.

Right now, investing in the most dominant players in a highly promising industry is the key to experiencing potentially monumental returns in the long term.

Here are the details of 3 such stocks from our smallcap guru, Richa Agarwal...

Act Now...

Low R&D Outlay
Indian pharma companies have dramatically cut down on their R&D spends. Especially on new generic drug discoveries.

The R&D expenditure is now lower relative to sales than before Covid-19. They stand at 4.4% of net sales, compared with 20% in the US.

Further just five of the top pharma companies in India account for two thirds of the R&D spends. Which means smaller drug makers spend next to nothing on R&D for new product launches.

This low focus on R&D has also made the sector a hotbed of copycat drugs and injectables, which leaves a lot of room for regulatory concern.

Pricing Pressure
Through Drug Price Control Orders (DPCOs), the Indian Government attempts to keep medicine prices under check.

According to various studies, currently, around 14% of drugs by value, and 25% by volume fall under price controls.

Such price controls leave very little upside for the margins and return ratios of the large pharma companies.

Now, it's true that the regulatory and pricing controls have caused investor apathy for the leading pharma stocks. But the irony is that the country is second only to the US in terms of the largest number of USFDA approved plants.

So, it remains to be seen whether Mankind Pharma gets more speculative interest in the IPO. Or whether investors are more willing to bet on its long-term potential despite the risks.

The Equitymaster Screener can help you screen pharma stocks that offer a stiff competition to Mankind Pharma.

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst

Equity Master says, "though Mankind is fourth largest pharma, it's a clear avoid on three reasons- Regulatory risks, Low R&D outlay and pricing pressure.

Be cautious in applying as high risk is involved.

@PADALISHWAR  next time onwards please post if possible the link to the article too.

Mankind is in the business of branded generic medicines. They don’t need to have a very strong R&D. Also, in the next 5 years from US and EU zone more than 200+ patents are going to end. (This is mentioned in the RHP of mankind in the Industry outlook part). Mankind has a good brand value they will benefit from this.

Pharma industry is and will be under regulatory risk forever. And so will be mankind.

Suppose mene 1 bhni application sub to 10k me sell kiya.
And muje 2 lot ka allotment mila to muje fir bhi 10k hi milege ya 20k milege?

alotmnet 195 share aaye ya 936 in bhni

10k hi milege aapko...

Got it Thank you bhai

Those who have sold in grey are applying..

QIB started applying giving some confidence.

Dear all respected members,

have one query - if I am applying in bHNI category then what are the chances of alloting shares worth full amount of 10 lacs?

@Tejas Pandya 
If bHNI subscription is more than 5 times that 20,000 application then allotment will not exceed 2 lakh equivalent application

@arunARUN Okay

At 16 30 day ONE of any IPO i have not seen more share demand in HNI category as compared to retail. Currently HNI 16.57 lakh share and retail 13.55 lakh share
Very surprising. At this rate HNI will get filled 1st then people will shift to retail?

Forward PE comparison

@arunARUN, you may be right. Bhai itni batting kar rahe ho iss company ke liye. High subscription se kya milega, agar long term ke liye lagana hai aur flip nahi karna hai. What is your motive? Koi raaj chupa hai to bata do hum nadan parindon ko, Shikar se bach jayen hum bhi.

@Happpy Singh 
I disagree. Whatever i have posted holds for any IPO. So how i can be batting for this IPO. I have not given my opinion so far. I have also not stated that what action i have taken so far. So how do you read that as batting. I don't comment on GMP as good or bad too. So itne naadan to aap nahi hain

Better to Skip this IPO.

Lets Wait for tata Technology ipo.

May be. But message will be relevant when they get SEBI sanction

Companies like MKP who have made tons and tons of money out of small initial capital because of their sheer Management Skills may fix the Issue price according to Market Demand. However they may do well to consider rewarding Retail Investors by offering shares to them at a discounted price.

My message suggesting some discount for small Retail Investors is meant to help those with low risk appetite to earn whatever they can by investing in IPO to supplement their earnings. SEBI also may do well to fix some norms. I recall there was a rule many years back by which IPO Issuers were required to buy back shares at issue price from the Original Retail Allottees in case of fall in price in a span of 6 months.

@Thiagarajan Ramasamy @PeterEngland 
Market is risky and unknown. I buy something at 3 30 PM and next day rate difference can occur at 9 00 AM.
2ndly the safety net concept has been withdrawn long time back. It was not meant to give profit but to ensure zero loss
3rdly in my view promoters are not in business of giving money away to any class of investors. I have not seen any mutual fund investor asking their mutual fund for discount.
4thly it is the SEBI rule of giving allotment to every investor of minimum lot size which has created problem in primary market. Prior to this rule average application value was Rs 1 lakh which has now come to around Rs 20,000. So yes SEBI has spread equity culture by giving larger number of allotees but many vultures who are looking for flipping on day 1 have jumped in IPO market
Lastly, basis subscription pattern, price and expected price every one is free to apply or not apply or sell in grey or do nothing. Actually many investors who can take risk don't get alltoment in retail segment

The appetite shown in Anchor portion is AWESOME.
If same thing continues on final day subscription figures then on listing day it may surprise everyone on positive side irrespective of its valuations.
Demand coupled with scarcity drives the PRICE ahead.

@Liger 

principal is same, they have all got shares at lower price, see DD review, for some he has return negligible to nil

@bhav
I find your thinking amusing. The book value of the share of the company is Rs 150 plus and you want promoter to sell you cheap as their cost of acquistion is nearly zero.
With your thinking no promoter should do IPO or FPO

GMP 96 BUYER KADAK

RAJKOT

MUST APPLY FOR GAINS

100+ jayegi ya impossible he?
Aap gray dealer he ya khud hi buyer he?

Latest Bhav 76 seller

Mankind Pharma IPO

GMP 78 +/- 1

78/82...Latest

Little risk is there, i guess better to avoid...we may get at discount after listing