Mumbai: Mankind Pharma will be funding its ₹13,630 crore acquisition of Bharat Serums and Vaccines (BSV) through internal accruals and a mix of debt and equity.
The company will generate ₹4,000 crore from internal accruals and the balance would be funded majorly through debt, chief financial officer Ashutosh Dhawan said Friday.
The quantum of debt and equity will be determined near to the closing timeline of the deal, he told analysts. The transaction is expected to close within three-four months subject to regulatory approvals.
“We are exploring various options at the moment,” Dhawan said. “We will ensure that the (net) debt amount will not be more than 2x (twice) of the FY26 Ebitda,” he added.
In May, Mankind’s board approved an equity fundraising of ₹7,500 crore, and also increased the borrowing limit to ₹12,500 crore. Mankind had a net cash balance of ₹3,260 crore and negligible debt as on March 31.
Mankind, India’s fourth largest pharmaceutical company by market share, said on Thursday that it entered into a definitive agreement to acquire BSV from PE firm Advent International.
The acquisition will be made at 22-23 times BSV’s expected FY25 Ebitda.
The deal will make Mankind the leader in the fast-growing gynaecology-fertility or women’s health segment with an around 20 per cent market share, edging past Emcure. In FY24, Mankind’s market share in the segment was 8.19 per cent .
Mankind said the acquisition is in line with its objective to expand its presence in high-entry-barrier complex portfolios and high-potential over-the-counter brands with accretive Ebitda margins.
Dhawan said servicing debt wouldn’t be a problem as both Mankind and BSV have strong fund generation abilities, with cash flow to Ebitda at around 70 per cent .
Mankind said the acquisition will be earnings-per-share accretive from the second year.
The Mankind management said they expect sustained double-digit revenue and 1-2 percentage point Ebitda margin growth yearly after the BSV acquisition, driven by synergy benefits, cost optimisation and product launches.
BSV had revenue of ₹1,723 crore in FY24, with year-on-year growth of 20 per cent and an Ebitda margin of 28 per cent . It has posted a 21 per cent compounded annual growth rate over the last three years.
