Molbio Diagnostics Targets ₹940 Crore in IPO for Expansion
Molbio Diagnostics plans to raise ₹940 crore through IPO for capital expenditure and promoter stake reduction, aiming to boost its global diagnostics reach.
Molbio Diagnostics, a leader in molecular diagnostics, has announced plans to raise a total of ₹940 crore through an Initial Public Offering (IPO). The funds are aimed at enhancing the company's capital expenditures and reducing promoter stakes. This strategic move is part of Molbio's broader vision to expand its footprint in the global diagnostics market.
Financial Strategy and Promoter Stake Reduction
The IPO consists of a fresh issue of shares worth ₹200 crore intended for capital expenditures, while ₹740 crore will be raised through an offer for sale. The promoter group's stake will decrease from 46.6% to 43% post-IPO. The reallocation of stakes is expected to attract new investors, especially those with a high-risk appetite, seeking long-term growth potential.
Global Reach and Product Portfolio
Founded in 2000, Molbio operates six manufacturing facilities in India and serves customers across more than 90 countries. The company is renowned for its 'Truenat' platform, a portable diagnostic system designed for resource-limited settings. Truenat provides rapid and accurate test results within an hour and is capable of diagnosing over 30 diseases through 43 diagnostic assays.
A significant portion of Molbio's revenue, about 74%, is generated from the sale of test kits. Notably, 70% of these sales come from tuberculosis diagnostic test kits, reflecting the company's strong position in this segment. Government and international aid agencies represent over 80% of Molbio's revenue stream, underscoring its reliance on institutional clients.
Financial Performance and Market Valuation
Between FY24 and FY26, Molbio's revenue from operations increased by 31.5% annually to ₹1,445.7 crore, with a net profit growth of 40.2% to ₹164.1 crore. The company's EBITDA rose by 33.2% to ₹328.2 crore, and the EBITDA margin improved from 22% in FY24 to 22.6% in FY26. On a year-on-year basis, FY26 saw a 41.7% increase in revenue, a 27.9% rise in EBITDA, and an 18.4% growth in net profit.
Molbio Diagnostics is demanding a price-earnings (P/E) multiple of up to 57 based on post-IPO equity and FY26 net profit. While it lacks direct comparables in the Indian market, similar companies like Poly Medicure, Dr. Lal PathLabs, and Metropolis Healthcare trade at P/E multiples ranging from 54 to 81.