Molbio Diagnostics raises ₹281.5 cr from anchor investors; World Bank's IFC makes IPO comeback after 5 years
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Point-of-care diagnostics company Molbio Diagnostics has raised ₹281.5 crore from anchor investors ahead of its initial public offering (IPO), drawing participation from marquee global and domestic institutions including Goldman Sachs, BlackRock, HDFC Mutual Fund and the International Finance Corporation (IFC).
The Goa-based diagnostics company, backed by Temasek and Motilal Oswal Private Equity, has allotted 34.87 lakh equity shares to 33 anchor investors at ₹807 apiece, the upper end of its price band, according to an exchange filing.
The anchor allocation comes ahead of Molbio’s ₹940-crore IPO, which will open for subscription today and close on August 12. The company has fixed a price band of ₹768-807 per equity share.
IFC returns to India’s IPO market after five years
A notable feature of the anchor book is the return of IFC, the World Bank Group’s private-sector investment arm, to India’s mainboard IPO market after a five-year gap. IFC has invested ₹20 crore in Molbio as part of the anchor allocation.
The last reported instance of IFC participating as an anchor investor in an Indian mainboard IPO was in June 2021, when it invested ₹10 crore in Hyderabad-based Dodla Dairy. IFC remained invested in Dodla Dairy until 2024, according to news reports.
IFC has said it has supported the health sectors of developing countries for more than 25 years through investments and advisory programmes, with a focus on strengthening private-sector participation in healthcare.
The Molbio anchor book saw participation from a broad mix of global investors, domestic mutual funds, insurers and alternative investment funds. Besides IFC, the investor list includes Goldman Sachs, BlackRock Global Funds, HDFC Mutual Fund, Mirae Asset, Nippon India Mutual Fund, ICICI Prudential AMC, Kotak Mahindra AMC, Tata Mutual Fund, Edelweiss Mutual Fund, WhiteOak Capital, HDFC Life Insurance and Bajaj Life Insurance, among others.
Domestic mutual funds received the largest share of the anchor allocation. Of the 34.87 lakh shares allotted to anchor investors, 23.54 lakh shares, or 67.51%, were allocated to nine domestic mutual funds applying through 19 schemes. Another 2.65 lakh shares, or 7.62% of the total anchor allocation, went to 10 life insurance companies.
₹940-crore IPO opens today
Molbio’s IPO comprises a fresh issue of ₹200 crore and an offer for sale (OFS) of ₹739.7 crore. The proceeds from the fresh issue earmarked primarily for expansion and capital expenditure.
The company plans to use ₹106 crore of the fresh issue proceeds to fund capital expenditure for setting up infrastructure for an R&D facility, Centre of Excellence and connected office space. Another ₹72 crore will be used to purchase plant, machinery and other equipment for its Goa Unit I, Goa Unit II and Visakhapatnam Unit. The remaining proceeds will be used for general corporate purposes.
Molbio operates in the molecular diagnostics and point-of-care testing segment. Its platform enables diagnostic testing closer to the point of care, reducing dependence on centralised laboratories and potentially enabling faster diagnosis.
Brokerages see long-term potential
Several brokerages have recommended subscribing to the IPO, citing Molbio’s growth prospects and its position in the molecular diagnostics market.
SBI Securities has assigned a ‘Subscribe for Long Term’ rating to the issue, noting that Molbio’s revenue, EBITDA and adjusted PAT grew at a compound annual growth rate of 31.5%, 17.2% and 9.7%, respectively, between FY24 and FY26.
The brokerage said the IPO is priced at an FY26 P/E multiple of 56.5x and an EV/EBITDA multiple of 28.5x, which it considers reasonable relative to the company’s growth profile, profitability, return ratios and established position in the diagnostics ecosystem.
According to SBI Securities, future growth is expected to be driven by assay expansion, increasing adoption of molecular diagnostics, international market penetration and investments in R&D and manufacturing capabilities.
Swastika Investmart has also recommended subscribing to the IPO, saying Molbio’s valuation is broadly in line with the industry and below the average P/E of 64.9x for listed peers. It also highlighted that the ₹200 crore fresh issue proceeds will be directed towards growth-oriented capital expenditure rather than debt reduction.
The brokerage cited Molbio’s leadership in molecular diagnostics, scalable device-and-consumables business model, healthy return ratios and margin expansion as key positives.