Mankind Pharma plans slumpsale of OTC business to yettobeincorporated arm
Homegrown drugmaker and consumer healthcare company, Mankind Pharma – makers of Manforce condoms and pregnancy test kit PregaNews – will carry out a slump sale of its overthecounter (OTC) business to a yettobeincorporated subsidiary.
The proposed whollyowned subsidiary, Mankind Consumer Products Pvt Ltd, will be incorporated to carry out “the business of trading and manufacturing of different consumer healthcare products predominantly OTC drugs”. It will have an initial paidup capital of ₹5 crore. And a further investment of up to ₹250 crore in one or more tranches.
The sale, to be effective on or before October 1 or any other date as may be mutually agreed, will enable the company to grow the OTC business in a “more focused manner”, and allow it to remain “agile in the marketplace” and create a stronger brand recall for the vertical.
“Slump sale of the OTC business of the company to (a) whollyowned subsidiary company proposed to be incorporated with the name of Mankind Consumer Products Pvt Ltd or any other name as approved by Ministry of Corporate Affairs,” it said in a notification.
KEY OTC PRODUCTS
Mankind Pharma’s key OTC products include the antiinflammatory and antibacterial product AcneStar, the HealthOk multivitamin tablets, the oral contraceptive brand Unwanted and the antacid GasOFast, besides those under its Consumer Healthcare vertical.
The OTC vertical had a revenue of ₹704 crore, or 8.7 per cent of the company’s reported revenue of ₹8,127 crore in FY23. As of March 31, net worth (of OTC business) stood at ₹155 crore or 2 per cent of Mankind Pharma’s at ₹7,783.91 crore in FY23.
Rajeev Juneja, Vice-Chairman and MD, Mankind Pharma
The company, which was reportedly evaluating its position and business strategy, was exploring various options to grow the OTC business in a more focused manner.
BRAND RECALL
Mankind Pharma informed the bourses that “The slump sale will enable the company to remain agile in the marketplace, build wider consumer reach and will create a stronger brand recall for the OTC business.”
Further explaining the rationale, the company said “rationalising its structure will provide opportunities to enhance stakeholders’ value by creating sustainable and quality OTC business.” The company will continue to have business operations with the proposed incorporated entity on an arm’s length basis, it added.
During the postresults analyst call, held in February, Rajeev Juneja, ViceChairman and MD of Mankind Pharma, said that in the consumer healthcare vertical, the primary sales were muted. But there was healthy growth in the secondary and tertiary sales “resulting in marketing share gain.”