India’s fourth largest drug maker Mankind Pharma Ltd is reportedly looking to sell 15% equity stake in the company at a premium valuation of some $500-$600 mn – this would value the company itself at $4 billion. ET Now reported that top PE funds Warburg Pincus and Bain and Company have shown preliminary interest in the deal. According to news reports, Mankind is looking to make inroads in the lucrative United States market and plans to file its first set of generic products with the regulator in 2018 even as India remains a priority market. “We will develop innovative products for the US market. We are setting up a manufacturing plant in the US with a total investment of $30 million. We are establishing this US manufacturing organically. The building setup is ready; however, equipment and utilities are under commissioning,” Rajeev Juneja, chief executive officer of Mankind Pharma reportedly said earlier last week.
The New Delhi-based company has been largely successful in India, as nearly 90% of its revenue comes from the Indian market. However, it will be difficult to replicate its success story in the United States as drug prices are among the highest there.
In financial year 2016-17, Mankind Pharma had reported revenue of around Rs4,400 crore, up 13% from a year ago. Currently, international business, which includes markets of Africa and Asia, contribute just Rs 100 crore of the total turnover. According to Rajeev Juneja, the company’s operating margin is about 21%.
In the healthcare space itself, American private equity (PE) fund Warburg Pincus is in the final stage of negotiations to acquire a minority stake in leading fertility hospital chain Indira IVF Hospital Pvt Ltd, Livemint reported quoting unidentified sources. The PE firm has been in the news for looking out for equity stakes in Indian firms as even in July this year, Warburg Pincus had reportedly sought details for buying equity stake in Air India.