Shares of Mankind Pharma fell 5.5% in morning trade on May 11 as the IT department of the income tax department searched the company’s Delhi office.

The search came just two days after the company’s impressive market debut, CNBC-TV18 reported. On May 9, Mankind Pharma was listed on the exchange at an issue price of Rs 1,080, a 20-fold premium to Rs 1,300. The pharmaceutical company’s initial public offering (IPO) was the largest IPO of 2023, with more than 15.32 times subscriptions.

Earlier, global brokerage Macquarie Research started coverage on the company with an “outperform” rating and a price target of Rs 1,400 a share, suggesting a potential upside of 30% to the issue price.

The company said its growth potential in the chronic disease segment could significantly expand its margins and net profit, which is expected to rise from 22% to 28% and net profit to more than double from Rs 1,300 crore in FY23 to Rs 2,800 crore by FY26.

Brokerage Antique has also covered the company with a ‘buy’ rating and a target of Rs 1,584. Metro and first-tier cities could be the new growth frontier, adding that it expects the business in India to grow at a compound annual growth rate of about 13% over the next three years.

“We like Mankind’s India franchise for its diverse therapeutic portfolio and brand contributions,” it said.

The company’s shares were trading down 4.36% at Rs 1,322.55 at 10:19 am on the National Stock Exchange, while benchmark Nifty Pharma was trading 1.06% lower at 12,582.40.