Mankind Pharma To Sell OTC Business In Slump Sale
The slump sale will enable the company to remain agile in the marketplace, build wider consumer reach and create a stronger brand recall for the OTC business, it said.
Mankind Pharma Ltd. has announced a slump sale of its over-the-counter business to a wholly owned subsidiary, which it will incorporate.
The subsidiary will be called Mankind Consumer Products Pvt., or any other name as approved by the Ministry of Corporate Affairs, an exchange filing said on Tuesday. It will have an initial paid-up capital of Rs 5 crore, with further investment of up to Rs 250 crore in one or more tranches.
A slump sale refers to transferring a part of, or the whole business, to another firm for a lump sum amount.
The above transaction will be effective on or before Oct. 1, subject to customary closing conditions, the filing said.
The company did not disclose the consideration amount, but it said it would not be less than the fair market value of the OTC business determined as per Income Tax Rules 1962.
Rationale Behind Slump Sale
The slump sale 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 filing said.
Rationalising its structure will provide opportunities to enhance stakeholders' value by creating sustainable and quality OTC business, it said.
The OTC business contributes 8.7% to Mankind Pharma's total turnover. Its revenue in FY23 stood at Rs 704 crore. The business' net worth was Rs 155 crore, which is 2% of Mankind's net worth of Rs 7,783.91 crore, as of March 31.