Molbio Diagnostics Eyes ₹940 Crore Through IPO to Fuel Growth
Molbio Diagnostics plans to raise ₹940 crore via IPO to expand operations and reduce promoter stake. The company has seen strong growth in TB test kit sales.
Molbio Diagnostics, a leader in molecular diagnostics, is set to raise ₹940 crore through an initial public offering (IPO) aimed at bolstering its capital expenditure and reducing promoter holdings. The move involves a fresh issue of shares worth ₹200 crore and an offer for sale generating ₹740 crore, which will lower the promoter group's stake from 46.6% to 43%.
Strong Revenue Growth Driven by TB Test Kits
The company, which operates six manufacturing facilities across India, serves over 90 countries, including governments, diagnostic labs, and international healthcare organizations. Molbio's revenue growth has been significant, largely due to its tuberculosis diagnostic test kits. These kits account for 74% of the company's revenue, with 70% stemming from TB diagnostics alone.
From FY24 to FY26, Molbio's revenue from operations grew by 31.5% annually to reach ₹1,445.7 crore. The net profit saw a 40.2% annual increase, amounting to ₹164.1 crore. The company's EBITDA rose by 33.2% to ₹328.2 crore, with the EBITDA margin improving to 22.6% in FY26 from 22% in FY24.
Truenat Platform and Diverse Offerings
Founded in 2000, Molbio has focused on developing diagnostic solutions for both infectious and non-communicable diseases. Its flagship Truenat platform provides rapid, accurate test results in resource-limited settings, offering over 30 disease-specific assays. The company also extends its offerings through subsidiaries, providing radiology, digital pathology, and breast health screening solutions.
Molbio's reliance on government and international aid agencies is notable, as they account for over 80% of its revenue. Its top clients contribute more than half of its revenue, indicating a concentration risk that potential investors should consider.
Valuation and Market Position
The IPO values Molbio at a price-earnings (P/E) multiple of up to 57, which is competitive compared to other Indian healthcare diagnostics and medical device firms like Poly Medicure and Dr. Lal PathLabs, whose P/E ratios range between 54 and 81. Despite no directly comparable listed peer in India, Molbio's strong financials and strategic global presence make it an attractive option for high-risk investors seeking long-term growth.
With its robust revenue growth and strategic capital investment plans, Molbio Diagnostics' IPO presents a promising opportunity, albeit with inherent risks due to customer concentration and market volatility.