Condom maker surges 23% in Mumbai debut after $529 million IPO

(Bloomberg) — Mankind Pharma Ltd. Soared 32% in its first day of trading in Mumbai after raising 43.3 billion rupees ($529 million) in one of India’s biggest IPOs of the year.

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Shares in the drug and contraceptive maker rose as high as Rs 1,430 on Tuesday before closing at Rs 1,422.30. Its shareholders had sold 40 million shares at Rs 1,080 each in the IPO, the top of a marketed range that started at Rs 1,026. Macquarie Research has started coverage of the stock with an Outperform rating.

The strong debut comes after anchor investors including the Canada Pension Plan Investment Board, the Government of Singapore and the Abu Dhabi Investment Authority combined to subscribe for nearly Rs 13 billion worth of shares in the offering. The company did not sell any new shares.

Mankind’s deal marks the return of mid-to-large debuts in India. Its performance could help fuel appetite for selling new stocks in the South Asian nation after IPO proceeds fell 13% year-to-date compared to the same period in 2022. India’s benchmark NSE Nifty 50 Index outperformed a broader gauge of emerging market stocks this quarter.

“The primary market saw an IPO after a long gap,” hence the high interest in the stock, said Hemang Jani, head of equity strategy at Motilal Oswal Financial Services Ltd. The healthcare sector has also had a good ride over the past two months and given the company’s “healthy financial track record, domestic focus and extensive network, humanity is likely to continue to thrive.”

Aside from real estate fund offerings, the IPO is India’s largest since Delhivery Ltd was listed. about a year ago. Mankind’s leap marked the biggest gain for the first day of trading in India since Zomato Ltd’s 66 percent surge. in July 2021.

Continued sales outperformance in India and focus on chronic therapies will be among the key drivers for Mankind, Macquarie Capital Securities India analyst Kunal Dhamesha wrote in a statement.

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Still, strong institutional demand following the IPO may not guarantee sustainable stock performance. “I still think the rally will be short-lived, especially if the broader market weakens,” said Tina Banerjee, a global health analyst who publishes on the SmartKarma platform.

Over the past five years, Mumbai stock market listings larger than $500 million have fallen an average of 8.2% on the first day, data compiled by Bloomberg shows.

The Indian market is awaiting other listings of a similar size, including from real estate investment firm Nexus Select Trust and brick-and-mortar Doms Industries.

The founders of Mankind and subsidiaries of private equity investors Capital International Group and ChrysCapital sold their shares in the IPO. Kotak Mahindra Capital Co., IIFL Securities Ltd., Jefferies India and JPMorgan India arranged the offering.

READ: India overtakes China as world’s most populous nation, according to UN

–With the support of Paresh Jatakia and Anirban Nag.

(Updates stock prices.)

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