Molbio IPO enters 2nd day of bidding: Should you bid for the listing? Check GMP
Molbio Diagnostics IPO enters the second day of bidding on Tuesday with the issue yet to be fully subscribed on the first day. The grey
Molbio Diagnostics IPO 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. Read Full Story 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 IPO GMP: WHAT IS THE GREY MARKET SIGNAL? 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. HOW DID MOLBIO IPO PERFORM ON DAY 1? 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. SHOULD YOU BID FOR MOLBIO FOR LISTING GAINS? 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. WHY BROKERAGES LIKE MOLBIO 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.
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