Mankind Pharma transfers OTC biz to subsidiary Mankind Consumer Products

Mankind Pharma has finalised a Business Transfer Agreement (BTA) to transfer its over-the-counter (OTC) business undertaking to its wholly owned subsidiary, Mankind Consumer Products Private Limited (MCPPL), on a slump sale basis.

The company’s consumer products portfolio includes several brands such as Manforce, HealthOK, Prega News, AcneStar, Unwanted and Gas-O-Fast across categories such as wellness, hygiene, and personal care products.

In its regulatory filing, the company said, “The company has completed the transfer of OTC Business Undertaking (defined in the BTA) as a going concern on a slump sale basis to MCPPL, a wholly owned subsidiary of the company on September 30, 2024.”

According to its statement, this strategic realignment is part of Mankind Pharma’s broader strategy to enhance its focus on the consumer business, which currently contributes 7% of the company’s overall revenue.

In Q1 FY25, the OTC business reported revenues of ₹206 crores, with an EBITDA margin of 19.5%. For FY24, it achieved a total revenue of ₹706 crores, maintaining a healthy EBITDA margin of 19.9%.

By subsidiarisation of the OTC business into a wholly owned subsidiary, Mankind Pharma aims to better capitalise on the potential of this business segment. This dedicated focus will enable in attracting the of specialised talent, tailored strategies around consumer needs and differentiated distribution channels. This move will allow the OTC business to thrive independently and will drive it to higher growth levels.

The transfer of the OTC business, will be undertaken as a going concern, meaning the business will continue to operate without interruption. As part of the slump sale, the transaction has been completed for a lump sum consideration.

Rajeev Juneja, Vice-Chairman & Managing Director of Mankind Pharma, said, “This decision has been made because the consumer business was previously managed with a concoction of pharmaceutical and consumer-focused strategies, which we believe can be better streamlined with a more tailored approach. We aim to differentiate the consumer business, with select leadership, specialised talent, and dedicated resources to help it thrive.”

He further added, "The consumer business is very close to our heart, and it currently contributes 7% to our overall business. Our ambition is to elevate this contribution to 15% in the long run. This requires a distinct business, where core stockists, major distributors, and specialised networks play a pivotal role, and we are committed to improving and building on those resources. By sharpening our focus on the consumer segment, we aim to strengthen brand recall and ensure our consumer brands resonate more effectively with our audience. This strategy is designed to accelerate growth in the consumer health space while improving operational efficiency across both pharmaceutical and consumer divisions.”

Aligned with its consumer-first approach, Mankind Pharma aims to drive innovation in healthcare by introducing products that cater to evolving consumer needs. Notable launches include Rapid News focusing on health concerns including Dengue, UTI, Menopause and Ova News, with a particular focus on DIY diagnostic tests and advancing the women's health agenda.

Through this strategic move, Mankind Pharma is poised to deliver accessible healthcare products to its consumers with an aim to strengthen its strategic focus on consumer business. This transition reflects Mankind Pharma’s commitment to leveraging growth opportunities within the OTC business through its wholly owned subsidiary, thereby enhancing operational efficiency and strengthening its position in the healthcare industry.