ChrysCap To Acquire 10% Stake In Mankind For $350 Mn

In the largest private equity deal in Indian healthcare industry till date, Mankind Pharma has agreed to sell 10% stake to ChrysCapital and its global sponsors for about $350 million, or Rs 2,280 crore.

ChrysCapital, arguably the most successful investor in Indian pharma, swooped down late to snatch the deal away from global rivals Advent International and Carlyle Group. In 2014, ChrysCapital had sold 11% stake in Mankind to Capital International for $214 million, reporting a 10-fold gain.

ChrysCapital partner Sanjiv Kaul sewed up a sensational comeback into the fastest growing domestic pharma company, following an informal meeting with Mankind promoters three weeks ago. By then, Mankind, the fourth largest domestic pharma company with 4.2% market share, had received two binding offers from Carlyle and Advent, but was open to ChrysCapital's return.

This is the biggest investment deal by ChrysCapital, also a transformational one by the India-bred PE firm, signaling its intent to vie with global funds in writing larger cheques.

Mankind Pharma, CEO, Rajeev Juneja while confirming the deal said, "We have huge respect for Sanjiv Kaul and ChrysCapital. They have added tremendous value to the company and the board. We are happy to welcome them back in next phase of growth.” It is rumoured that Carlyle and Advent lost the race to ChrysCapital consortium, despite submitting slightly higher bids, but Mankind wouldn't talk about valuations.

ChrysCapital through Kaul has invested $300 million in pharma companies, generating over five-fold returns until now, possibly the best consistent profitable exits in Indian private equity business. ChrysCapital has backed several emerging Indian pharma powerhouses such as Intas, Torrent, Zydus and GVK Bio among others.

New Delhi based Mankind Pharma clocked annualised revenue topping Rs 5,000 crore in the just-ended fiscal. It was one of the few domestic pharma companies that remained on growth curve even as the broader sector struggled with price controls and difficult export markets. Mankind, with its focus on lower pricing, is seen best suited to take advantage of Indian government's push towards affordable medicine.

Juneja said, "We have always emphasised on affordability almost one company case in the sector - and have had 23 years of uninterrupted growth. We are happy that affordable medicines are getting the due focus in a market like India.” Ramesh Juneja founded Mankind is selling shares to ChrysCapital in a secondary deal. Junejas and Aroras will continue to hold 79% after the share sale.