enters the second day of bidding on Tuesday with the issue yet to be fully subscribed on the first day. The grey market, however, is pointing to a potential premium listing, while brokerages have recommended subscribing to the issue, particularly for investors with a medium to long-term investment horizon.
The Rs 939.70 crore IPO opened for subscription on August 10 and will close on August 12. The price band has been fixed at Rs 768-807 per share, with a lot size of 18 shares. At the upper price band, retail investors need Rs 14,526 to apply for one lot.
The issue comprises a fresh issue of Rs 200 crore and an offer for sale of Rs 739.70 crore. The shares are scheduled to list on BSE and NSE on August 17.
Molbio Diagnostics’ latest grey market premium, or GMP, stands at Rs 127.
At the upper IPO price of Rs 807, this points to an estimated listing price of around Rs 934 per share.
That indicates a potential listing gain of about 15.74% over the upper end of the IPO price band.
However, GMP is an unofficial indicator and does not guarantee the actual listing price. The stock can list at a price above or below the grey-market estimate.
The GMP has also fluctuated in the run-up to the IPO. It was Rs 170 on August 5, rose to Rs 220 on August 6, then declined to Rs 180 on August 7 and Rs 130 on August 8. It stood at Rs 122 on August 9 before recovering to Rs 127 on August 10.
So, while the grey market continues to signal a premium listing, the movement also shows that expectations have not been steady.
Molbio Diagnostics IPO was subscribed 0.83 times at the end of the first day of bidding.
The retail portion was subscribed 0.77 times, while the QIB category, excluding anchor investors, was subscribed 1 time. The NII category was subscribed 0.73 times as of 5:07 pm on August 10.
With two days of bidding still remaining, investors will be watching whether retail and non-institutional demand picks up before the issue closes on August 12.
If the objective is purely listing gains, the current GMP is encouraging.
A GMP of Rs 127 over the upper issue price of Rs 807 indicates an estimated listing price of Rs 934 and a potential gain of around 15.74%.
But GMP alone does not determine whether an IPO is worth subscribing to. Investors also need to look at the company’s business, financial performance, valuation and the risks highlighted by brokerages.
On that front, the brokerage view is positive.
Geojit Investments has given the IPO a ‘Subscribe’ rating for investors with a medium- to long-term investment horizon. It said Molbio is valued at around 56 times FY26E P/E at the upper price band, which is broadly in line with the industry average. Geojit highlighted Molbio’s leadership in molecular diagnostics, its device-and-consumables business model, industry tailwinds, growth potential and strategic acquisitions.
Ventura Securities, BP Equities, SBI Securities and Swastika Securities have also recommended subscribing to the IPO. BP Equities and SBI Securities specifically recommended the issue for investors with a long-term investment horizon.
A key attraction is Molbio’s proprietary Truenat platform, a portable molecular diagnostics system designed to provide testing closer to the point of care.
The company has developed 43 assays covering 30 diseases, including tuberculosis, hepatitis, HIV, HPV and Covid-19, according to SBI Securities.
Another important part of the business is its recurring revenue model.
Molbio sells diagnostic devices as well as test kits and consumables that are used with those devices. Test kits accounted for around 74% of product revenue in FY26, according to SBI Securities.
BP Equities described this as a closed-system model, where the installation of a diagnostic device can create recurring demand for the company’s proprietary test kits.
The company has also reported strong financial growth.
Revenue from operations rose from Rs 1,020 crore in FY25 to Rs 1,446 crore in FY26, an increase of 41.7%. EBITDA rose from Rs 262 crore to Rs 321 crore, while adjusted profit after tax increased from around Rs 150 crore to Rs 165 crore.
Ventura also noted that test-kit volumes rose to 17.56 million units in FY26 from 12.24 million in FY25, supporting the recurring-revenue nature of the business.
The brokerage reports have also flagged risks that investors should consider before subscribing.
One of the biggest is customer concentration.
SBI Securities said 84.6% of Molbio’s product sales revenue in FY26 came from Indian central and state governments and international aid agencies. Its top 10 customers accounted for 83.3% of product sales revenue.
There is also a high dependence on tuberculosis testing.
Around 70.2% of FY26 test-kit sales revenue came from TB diagnostic kits, according to SBI Securities. This creates a concentration risk around a single disease segment.
Margins have also moderated. EBITDA margin declined from 25.7% in FY25 to 22.2% in FY26, while adjusted PAT margin fell from 14.7% to 11.4%.
Working capital is another area to watch. SBI Securities said the average cash conversion cycle stood at 323 days in FY26, partly reflecting long payment cycles from government bodies.
At the upper price band of Rs 807, Molbio is valued at around 55-56 times FY26 earnings, based on the calculations in the brokerage reports.
SBI Securities puts the FY26 P/E at 56.5 times, while BP Equities calculates it at 54.6 times. Both note that the valuation is below the average multiple of the listed peer group.
Geojit, meanwhile, said the company’s valuation at around 56 times FY26E P/E is in line with the industry average.
Swastika Securities has also recommended subscribing to the issue, citing Molbio’s position in molecular diagnostics, growth prospects, return ratios and valuation.
For investors looking purely for a listing gain, Molbio’s current GMP provides a positive signal. The Rs 127 GMP indicates a possible listing price of Rs 934, or a potential gain of around 15.74% over the upper issue price.
But this is only an unofficial grey-market indication and should not be treated as a guaranteed return.
For medium- to long-term investors, the brokerage reports are more clearly positive. Geojit Investments, Ventura Securities, BP Equities, SBI Securities and Swastika Securities have all recommended subscribing to the IPO, with BP Equities and SBI Securities specifically recommending it for investors with a long-term horizon.
The positive view is based on Molbio’s Truenat platform, its recurring test-kit business, strong FY26 revenue growth, molecular diagnostics leadership and expansion opportunities.
At the same time, investors need to consider the company’s dependence on government and institutional customers, high exposure to TB testing, working-capital requirements and the moderation in margins.
So, the GMP currently points to a potentially positive listing, while the brokerage reports support subscription for investors with a medium- to long-term view. But the GMP is not a guarantee of listing gains, and investors should consider the company’s fundamentals and risks before bidding.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)