Molbio Diagnostics IPO Sees Modest 13% Subscription, GMP Signals Potential 16% Listing Premium

Molbio Diagnostics IPO Sees Modest 13% Subscription, GMP Signals Potential 16% Listing Premium​

Initial Investor Response and Offering Structure​

Goa-based point-of-care molecular diagnostics company Molbio Diagnostics saw a moderate response from investors as of 11:00 am on August 10. The Rs 940-crore initial public offering (IPO) stood at 13 percent subscribed, according to NSE data.

The IPO offered around 81.59 lakh shares against bids totaling 10.34 lakh. Retail investors drove the demand for the issue. The retail portion was subscribed 20 percent, while the non-institutional investor (NII) category reached 11 percent subscription.

The public issue remains available until August 12. The set price band for the stock has been fixed at Rs 768 to Rs 807 per share.

Grey Market Premium and Listing Outlook​

Despite the moderate IPO response, Molbio Diagnostics was trading with a healthy premium in the grey market (GMP). InvestorGain reported a GMP of Rs 132 over the upper end of the price band. This translates into a potential listing gain of 16 percent.

It is crucial for investors to note that the GMP serves as an unofficial indicator and is subject to change before the actual listing date. It should not be considered a guaranteed return.

Anchor Investor Participation Highlights​

Prior to the public issue, Molbio Diagnostics successfully raised Rs 281.5 crore from anchor investors. The company allotted 34.87 lakh equity shares to 33 anchor institutions.

Global institutional interest was evident in the anchor allocation. Goldman Sachs invested Rs 30 crore. The International Finance Corporation (IFC) and BlackRock Global Funds each contributed Rs 20 crore.

Domestic mutual funds played a significant role in this pre-IPO round. Nine domestic mutual funds, including HDFC Mutual Fund and Kotak Mahindra Asset Management Company, received allotments. These funds included Nippon India Mutual Fund and Mirae Asset.

IPO Composition: Fresh Issue vs Offer For Sale​

The total Rs 940-crore offering structure includes both a fresh issue and an offer for sale (OFS). The OFS consists of 91.66 lakh shares, valued at approximately Rs 739.7 crore, offered by existing shareholders.

A fresh issue component amounting to Rs 200 crore is also part of the offering. This money will be utilized by Molbio Diagnostics for strategic corporate growth and facility expansion.

Strategic Use of Fresh Issue Proceeds​

The company has outlined a clear deployment plan for the fresh issue funds. A significant portion, Rs 105.5 crore, is earmarked for establishing a research and development facility and a Centre of Excellence through its subsidiary Bigtec. This includes dedicated office space for Molbio Diagnostics and its entities.

Another allocation of Rs 72.2 crore will be used to acquire necessary plant, machinery, and equipment required for the manufacturing facilities located in Goa and Visakhapatnam. The remaining funds are designated for general corporate purposes.

Anchor Allocation Details and Company Profile​

The allotment to life insurance companies totaled 10 institutions receiving 2.65 lakh shares, valued at Rs 21.44 crore.

Molbio Diagnostics is a technology-driven company that has developed the Truenat platform. This patented point-of-care molecular diagnostics system is used across over 100 countries. It is designed to detect various infectious and non-communicable diseases.

The platform supports testing for several critical diseases, including COVID-19, HIV, Tuberculosis, Hepatitis B and C, and Human Papillomavirus. Molbio Diagnostics currently offers molecular diagnostic tests covering 30 diseases across 43 assays.