Mankind: How Meerut brothers built India’s 4th largest pharma firm

India’s fourth largest pharma company is taking a big leap with a costly acquisition which many think needs to be watched. But Ramesh C Juneja and Rajeev Juneja, who cofounded Mankind, think the partly debt-funded Rs 13,630 crore acquisition of Bharat Serums and Vaccines Ltd (BSV), announced in late July, will add powerful muscle to the company.
Mankind is set to raise more than Rs 9,000 crore through a mix of non-convertible debentures and short-term commercial paper to finance the acquisition, ET has reported based on information from sources. The average blended cost of the debt is likely to be around 8.50% with the firm seeking to borrow money over one-to-five years.
BSV is a leading branded specialty pharma platform in women’s health and critical care with sales in India as well as abroad. The company earned revenues of ₹1,723 crore in FY24 with adjusted ebitda margin of 28%. Revenues have grown at a CAGR of 21% over the last three years. BSV’s portfolio complements Mankind, which is a leader in the Indian gynecology market, providing access to high entry-barrier specialty products along with complex R&D tech platforms. Founded in 1971, biopharmaceutical company BSV has a research and development center in Mumbai with over 100 scientists and operations that cover more than 70 countries, as well as subsidiaries in Germany, the Philippines and the US, according to its website.
Risky bet or big leap?
But the partly debt-funded acquisition by a nearly debt-free company hasn’t enthused the market much. There are also concerns over an expensive purchase as well as the scope of integrating a niche R&D-driven business vertical in a large domestic-focussed pharma company.
But Juneja brothers are confident that their founders’ biggest bet so far will pay off well.
Managing Director Rajiv Juneja told ET recently that the company can clear out debt taken for the BSV acquisition in less than three years. Juneja exuded confidence that Mankind will be able to infuse its energy into BSV and use its network of doctors and marketing capabilities to expand the reach of the latter’s offerings that include some “high entry barrier products”.
“They have everything that Mankind is lacking,” Juneja had told ET. “People had asked the same questions about Panacea,” he said, referring to Mankind’s 2022 acquisition of that company’s formulation brands for Rs 1,872 crore, which was also termed by some analysts as “overpriced”.
“Panacea gave us transplant medicines. It gave us a patented product called Sitcom for hemorrhoids. It gave us Glizid, a number two product for diabetes, and Nimulid, a popular painkiller brand,” he said. “Everything was fitting. Nothing in the company was overlapping.” And now, Panacea products are growing at a rate of 20-25%, said Juneja, a college dropout who started working in the family business started by his elder brother Ramesh Juneja at the age of 18. “So, extrapolate Panacea to 10 or more times…it (BSV) is better than that,” he said. And now, Panacea products are growing at a rate of 20-25%, he said Juneja.
Juneja knows what he talks about. The college dropout had started working in the family business started by his elder brother Ramesh Juneja at the age of 18
How Juneja Brothers built Mankind Pharma from ground up
Think of Mankind and you will think of hugely popular consumer health brands such as Prega News, Manforce, HealthOK and Gas-O-Fast. Ramesh Juneja, 69, the elder brother of Rajiv, has also coined all these brand names which have cornered large market shares.
When he coined the name for his new pharma company, Mankind Pharma, in 1995, he had Rs 50 lakh to start with.
The Juneja brothers hail from Meerut in Uttar Pradesh. The elder Juneja was a marketing representative for a pharma company and his younger sibling worked at a chemist’s shop. Their on-field experience and background helped them pay attention to the unique needs and aspirations of consumers in rural and small-town India.
In addition to a razor-sharp focus on consumers at the bottom of the pyramid, affordable prices and an aggressive marketing and sales pitch were other factors that led to their success.
Despite the huge gaps in the Indian healthcare market, it still wasn’t easy for new entrants. Mankind didn’t have its own manufacturing facilities and was relying on contract makers. Its medical reps were initially held in disdain by larger counterparts – many regarded them as just another fly-by-night operator.
The Junejas kept their heads down and worked on implementing the pricing and marketing strategy. To gain volume, Mankind went after general practitioners over specialists. Its drugs were priced much less than the competition. Ad campaigns focused on consumer-led subjects such as sexual health and acidity. As it expanded, the company roped in Bollywood superstar Amitabh Bachchan as a brand ambassador, as well as other regional film stars, to make Mankind a household brand. Simultaneously, it created a well-oiled marketing and sales engine. Mankind hires most of its reps from small towns and gives them liberal commissions on sales, showing them a career growth path. This keeps the field force motivated with low attrition rates. Mankind has 15,000 marketing and sales reps.
The company has for the last five years been ranked number one in the number of prescriptions. Manforce condoms, oral contraceptives Prega News and Unwanted 72, Gas-o-Fast (antacid), AcneStar (skin brand) and multivitamin HealthOK News are among the top-selling consumer health brands in India.
In May last year, Mankind had a successful IPO, listing at a 20% premium. The stock has since risen nearly 74%. Mankind had revenue of Rs 8,749 crore and profit of Rs 1,310 crore in FY23. Domestic revenue accounted for 97% of the total. For FY24, revenue rose to Rs 10,335 crores and net profit increased to Rs 1,942 crore. The company had a net cash balance of Rs 3,260 crore as on March 31, 2024. The company has for the last five years been ranked number one in the number of prescriptions. Last year, Juneja brothers bagged the ET Award for Corporate Excellence.
Inspired by JRD Tata, Rajeev’s goal is to make Mankind into an institution. “My ideal has been JRD Tata. I read his book, ‘Behind The Last Blue Mountain’ and since then, I have been thinking can we create some kind of institution,” he told ET. His aim is to make Mankind the number one pharmaceutical company in India by revenue. “Growth is a byproduct, but we want to become number 1 in terms of value and culture too,” he said.
Source: Indiatimes

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