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ChrysCapital Sells 11% Stake In Mankind Pharma For $200 Mn

Home-grown private equity giant ChrysCapital has sold its existing 11 per cent stake in Delhi-based Mankind Pharma to Capital International Private Equity Fund for $200 million in a secondary transaction.

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Home-grown private equity giant ChrysCapital has sold its existing 11 per cent stake in Delhi-based Mankind Pharma to Capital International Private Equity Fund for $200 million in a secondary transaction.

It is understood that ChrysCapital has clocked over 13 times the returns over the $21 million investment it had made in the pharmaceutical company around 7 years ago.

Established in 1995, Mankind Pharma is amongst the top pharmaceutical firms in the country. It's revenues for the fiscal ended March 2015 stood at Rs 3,500 crore. While it is known for its drugs in categories including antibiotic, antifungal, gastrointestinal, anthelmintic, cardiovascular, dermal, there are some over-the-counter products such as pregnancy testing kit Prega News and condom brand Manforce that it sells. Currently, around 90 per cent of its revenues is generated from prescription drugs.

For ChrysCapital, that manages $2.5 billion across six funds, this marks yet another successful exit in the healthcare/pharma space. After Earlier this year, the PE giant exited partially from Torrent Pharma, clocking over three times returns in less than 18 months of investing. Last year in November, it made its exit from Intas Pharma as it sold its stake to Temasek for $160 million crore, thereby making over 20-fold return.

Pharma/healthcare sector is considered a safe bet for fund managers as returns in this sector are relatively assured, said experts.

Healthcare sector in India is poised for a rapid growth and is expected to be $280 billion in terms of size in another 5 years, growing at a compound annual growth rate of 16 per cent, as per a joint report by FICCI-KPMG. It primarily caters to the domestic market and is independent of any slowdown gripping other sectors that are riding on the domestic consumption wave.

So, at a time when new age sectors such as e-commerce and mobile are emerging as hot investment destinations for risk capital, the traditional healthcare sector is witnessing an upswing and raking in huge moolah from the investor fraternity. This is both in terms of investments and exits.

According to data available with Grant Thornton, in the January-September period this year, as many as 36 deals were sealed in the pharma, healthcare & biotech companies where total amount invested in them stood at $1,015 million. While the number of investments is lesser this year than what it was in the corresponding period in 2014, what is noteworthy is the fact that in terms of total deal size, PE and VC funds invested more than double the amount they invested last year. In the first 9 months of 2014, risk capital investors infused $445 million.