Mumbai July 4 2023: The stellar performance of Mankind Pharma Ltd. since its listing in Mumbai in May could trigger more consumer-related initial public offerings in India in the second half, according to bankers.
The company, which raised 43.3 billion rupee ($528 million) in India’s second-largest new share sale this year, has seen its shares jump 57% in almost two months, drawing a rush of buy calls from analysts.
Mankind has strong name recognition among Indian consumers and investors due to its popular line of fast-moving consumer products, including condoms, sanitizers and antacids. The stock is a good example of what investors are willing to buy when it comes to IPOs, according to Peihao Huang, co-head for Asia ex-Japan ECM at JPMorgan Chase & Co. in Hong Kong.
“It’s consumer health, domestic driven, has scale and is profitable,” she said in an interview. “We’re seeing increasing interest regarding India. Domestic consumption is really picking up, supported by favorable government policies. The success of Mankind Pharma was pretty helpful for the overall IPO market.”
IPOs in India have raised almost $2.1 billion this year, a 60% drop from the same period of 2022 when proceeds were buoyed by Life Insurance Corp. of India’s $2.7 billion listing, the nation’s largest on record. Most countries have seen a slump in fundraising through equity sales this year amid concerns of slowing economies and rising interest rates.
Still, India’s main equities benchmark has outperformed emerging market peers this year as domestic spending helped drive economic growth. As well, a slowdown in offerings by Chinese companies has given India an edge as investors seek potential returns in alternative emerging markets.
ASK Automotive Ltd., a New Delhi-based supplier to motorcycle makers, and Ola Electric, a manufacturer of electric vehicles that last month began building its gigafactory in the southern state of Tamil Nadu, are among consumption-focused companies working on offerings in India.
“India is the next growth engine of the world,” said Selina Cheung, co-head of Asia equity capital markets at UBS AG in Hong Kong. The country is among regions that should see “a lot more” deals coming, she added.