Mankind Pharma Ltd, one of India's leading pharmaceutical companies, announced today that it has approved the slump sale of its Over the Counter (OTC) Business to a wholly owned subsidiary, proposed to be incorporated as Mankind Consumer Products Private Limited. The transaction, subject to customary closing conditions, is expected to be effective on or before October 1, 2024.
OTC products are those that the company does not require approval from the drug regulator to sell. These include various nutraceutical products and health supplements.
The business contributed Rs 704 crores (8.7%) to the company's total revenue of Rs. 8,127 crores in the financial year 2022-2023.
The proposed wholly owned subsidiary, Mankind Consumer Products Private Limited, will have an initial authorized capital of Rs. 5 crores, and the company plans to further invest up to Rs. 250 crores in one or more tranches as per business requirements. The new subsidiary will carry out the business of trading and manufacturing various types of consumer healthcare products, predominantly over the counter drugs & products.
Mankind Pharma believes that this strategic move will enable the company to remain agile in the marketplace, build wider consumer reach, and create a stronger brand recall for the OTC Business. The company expects this rationalization of its structure to provide opportunities to enhance stakeholders' value by creating a sustainable and quality OTC Business.
The slump sale, being a related party transaction, will be undertaken at arm's length and does not form part of any Scheme of Arrangement.
The transaction does not require any governmental or regulatory approvals and will not result in any change in the shareholding pattern of Mankind Pharma Limited.
With this move, Mankind Pharma aims to streamline its operations and unlock the potential of its OTC Business, while continuing to focus on its core pharmaceutical business. The company will continue to have business operations with the proposed incorporated entity on an arm's length basis.