Mankind Pharma Lists its OTC Business for Sale

Mankind Pharma has announced its decision to greenlight the slump sale of its Over the Counter (OTC) Business. This business segment encompasses products that do not necessitate approval from the drug regulator for sale, including a variety of nutraceutical products and health supplements. Expected to take effect on or before October 1, 2024, the transaction is contingent upon customary closing conditions.

During the fiscal year 2022-2023, the OTC Business contributed Rs 704 crores (8.7%) to the company's total revenue of Rs. 8,127 crores. In line with this move, a wholly owned subsidiary, tentatively named Mankind Consumer Products Private Limited, is slated to be established. Initial authorized capital for this subsidiary stands at Rs. 5 crores, with plans for further investments of up to Rs. 250 crores in one or more tranches to cater to business demands. The subsidiary will primarily engage in trading and manufacturing various types of consumer healthcare products, with a focus on over-the-counter drugs and products.

Mankind Pharma views this strategic maneuver as pivotal in maintaining market adaptability, expanding consumer outreach, and fortifying brand recognition within the OTC segment. The company anticipates that restructuring its framework will furnish opportunities to elevate stakeholder value by fostering a sustainable and high-quality OTC Business. Notably, the slump sale, classified as a related party transaction, will be executed at arm's length and is independent of any Scheme of Arrangement.

This transaction does not necessitate approvals from governmental or regulatory bodies and will not induce alterations in the shareholding pattern of Mankind Pharma Limited. With this initiative, Mankind Pharma aims to streamline its operations and unlock the latent potential of its OTC Business, all while maintaining focus on its core pharmaceutical endeavors. The company is poised to sustain business relations with the newly formed entity in a manner consistent with an arm's length approach.