Mankind Pharma Approves Slump Sale of OTC Business to Wholly-Owned Subsidiary

2 Apr 2024 , 02:32 PM

Mankind Pharma Ltd. has approved the sale of its “Over The Counter” (OTC) business to a wholly-owned subsidiary yet to be incorporated.

The exact value of the transaction remains undisclosed, but it will not be less than the fair market value of the OTC business, determined according to the Income Tax Rules, 1962.

The OTC business generated revenue of ₹704 Crore for the financial year 2023, accounting for 8.7% of Mankind Pharma’s total annual revenue of ₹8,127 Crore.

Mankind Pharma plans to establish a wholly-owned subsidiary named Mankind Consumer Products Pvt. Ltd. or any other name approved by the Registrar of Companies of the Ministry of Corporate Affairs, maintaining arm’s length business operations with the unit.

The slump sale aims to enhance market agility, broaden consumer reach, and reinforce brand recall for the OTC business, as stated in Mankind Pharma’s exchange filing. The company has been assessing its position, business strategy, and growth options for the OTC business.

The new subsidiary will have an initial paid-up capital of ₹5 Crore, with a potential further investment of up to ₹250 Crore in one or more tranches, subject to board decisions.

A Slump Sale involves the sale of an undertaking as a going concern, with consideration in a lump sum without considering individual values. Mankind Pharma’s shares are currently trading 2.46% higher at ₹2,368.

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