Molbio Diagnostics

Molbio Diagnostics Limited

Molbio Diagnostics manufactures Truenat, a portable battery-operated PCR (polymerase chain reaction, a lab method) platform that screens and diagnoses 30 diseases at the point of care in under an hour. It is a closed system, so the devices run only Molbio's single-use test kits, which were 73.98% of finished goods revenue in FY26. TB was 96.02% of the 17.56 mn kits sold. Founded in Goa in 2000 by Sriram Natarajan and Dr. Chandrasekhar Nair, it has sold over 12,500 devices across more than 90 countries. FY26 revenue was 1,446 cr.

DRHP filed: August 22, 2025

IPO open & close: August 10, 2026 to August 12, 2026

Listing date: August 17, 2026 (BSE and NSE)

BRLM: Kotak Mahindra Capital Company, IIFL Capital Services, Jefferies India and Motilal Oswal Investment Advisors (involved only in marketing the offer, as India Business Excellence Fund III is its associate)

Auditor: S.R. Batliboi & Associates LLP

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Molbio sells a battery-run PCR platform that works where lab infrastructure does not. It is WHO-recommended since 2020 and the main challenger to Cepheid's GeneXpert. Each installed device keeps pulling kit revenue for years, and kit volumes grew from 8.80 mn to 17.56 mn in 2 years. While the volumes are growing, the price pressure is also real, with the customers, which are government & aid agencies (~85% of product revenue) having significant pricing leverage. Almost ~96% of kits were used for TB (tuberculosis), and prices realised on devices & kits have fallen every year. At ~29x EV/EBITDA (57x P/E), the valuation doesn't comfort us at this stage despite backing from Temasek & Motilal Oswal, and we would want a correction to evaluate this as a buying opportunity.

One can expect decent listing gains as per current GMP ~17% (11 Aug 2026), provided the GMP sustains.

•    Molbio makes Truenat, a portable battery-run PCR platform that diagnoses disease at the point of care in under an hour against 2 to 7 days for lab PCR. It is a closed system: the Trueprep and Truelab devices run only Molbio's single-use test kits, so each installation creates recurring kit demand. Kits were 73.98% of finished goods revenue in FY26 and devices 14.53%. The platform covers 30 diseases through 43 assays, but TB was 96.02% of the 17.56 mn kits sold.

•    Point-of-care molecular TB testing is a two-player market: Cepheid's GeneXpert, sold since 2010, and Truenat, its first competitor. In January 2020 the WHO Global TB Programme recommended Truenat as an initial TB test in place of smear microscopy, the century-old method that is cheap but misses many cases and cannot detect drug resistance. WHO does not licence products, but its recommendation lets national programmes and donors like the Global Fund buy a test. TruNat’s advantage is more in deployability than accuracy: GeneXpert cannot run on a battery without air conditioning. Cochrane (independent body) reported in 2025 that Truenat catches 81.0% of genuine TB cases against Xpert Ultra's 93.7% (sensitivity), while correctly clearing 97.0% of healthy people against 95.3% (specificity). ICMR certification took 13 years of R&D and the group holds 16 patents in India and 191 abroad. Motilal Oswal's IBEF III entered in 2020 and Temasek in 2022, both after certification, and both are largely holding, with Temasek selling nothing and IBEF III only 7% of its stake.

•    Sriram Natarajan founded Molbio in Goa in 2000 after building Tulip Diagnostics (sold to PerkinElmer in 2017). Co-founder Chandrasekhar Nair's Bigtec, tied to Molbio by an IP agreement since 2011, came in as a wholly owned subsidiary when its holding company amalgamated in 2016. Bigtec still licenses the micro-PCR IP for 10% of revenue, with CSIR (government research body) part-funding early development from 2005. Revenue was 51.6 cr in FY20 after two decades of losses. WHO endorsement in January 2020 and an order of 1,512 devices took it to 1,272 cr in FY21 on COVID, then 332 cr in FY23 once COVID testing stopped.

•    Growth has been volume led. Devices sold rose from 2,011 in FY24 to 2,180 in FY25 and 2,524 in FY26, kits from 8.80 mn to 12.24 mn to 17.56 mn. Subtracting yearly sales from the 12,500 cumulative base implies an installed base of 7,796, 9,976 and 12,500 at each year end, on which each device ran 1,296, 1,377 and 1,563 tests and earned kit revenue of 8.14, 8.23 and 9.21 lakh a year against a device price of 8.05 lakh in FY26. The consumable stream now repays the device inside a year. Device useful life is not disclosed.

•    The buyer sets the price, not the company. Government and aid agencies were 84.56% of finished goods revenue in FY26 and the single largest customer 56.52%, with no firm commitment contracts. Private demand stays thin because NTEP, the government's TB programme, gives testing free and private labs already have power and air conditioning. Realisation per device fell 12.3% over two years to 8.05 lakh and per kit 6.1% to 589 Rs. Truenat's donor price of USD 7.90 (Stop TB Partnership, March 2023) now sits 0.07 below Xpert Ultra's 7.97 after Danaher cut it to cost in September 2023.

•    Exports fell from 197 cr in FY25 to 139 cr in FY26, and from 19.32% of revenue to 9.62%. Export demand runs on foreign aid money. USAID, the US government's aid agency, was shut down in 2025, and the US had been funding close to half of all international donor spending on TB. The Global Fund, which finances TB programmes in poorer countries, had its 2024-26 budget cut by USD 1.4 bn. Nigeria, Peru and Indonesia are the largest export markets. Export kits fetch a higher price than Indian ones, which might have led to also pressurized margins a bit.

•    Gross margin held at 59.31% (FY24), 59.35% (FY25) and 60.15% (FY26) and EBITDA margin fell from 28% to 22% in two years. Commission to distributors went from 39 cr (4.7% of revenue) in FY24 to 168 cr (11.6%) in FY26. Employee cost also rose from 7.6% to 10.0% of revenue.

•    R&D sits in Bigtec, and the RHP counts every Bigtec expense as R&D, so the 59.8 cr, 68.6 cr and 87.5 cr reported for FY24 to FY26 is an upper bound. R&D expense as % of sales were 6-7% in FY24-26, while headcount rose from 69 to 153. Of the 200 cr fresh issue, 105 cr moves the rented R&D unit into an owned 150,000 sq ft building with a centre of excellence for outside innovators, and 72.3 cr automates plants running at 42.30% and 58.25% utilisation. It states key strategies as entering into the US and EU, new point-of-care platforms and further acquisitions.

•    Debtor days improved from 134 to 86 and the cash conversion cycle from 312 to 230 days, yet FY26 operating cash flow was 50.4 cr against PAT of 164 cr. Also note that, Three CFOs have served since March 2024.

•    At 807 the issue is asked at 29x FY26 EV/EBITDA and 57x P/E. These valuation levels doesn’t comfort us at this stage, and we would want a valuation correction, to evaluate this as buying opportunity. While the volumes are growing, the price pressure is real, with the buyer dictating price of kits.

Business

•    Molbio manufactures Truenat, a point-of-care molecular diagnostics platform. Conventional PCR needs a proper lab, trained staff and continuous power and takes 2 to 7 days. Truenat is battery-operated, portable and returns a result in under an hour, so it can sit in a village primary health centre.

•    The model is device + consumable. The platform is two instruments sold together, Trueprep which prepares the sample and Truelab which runs the PCR, available in single, dual and four-test variants. It is a closed system, so an installed Truenat cannot run a competitor's kits. Test kits contributed 73.98% of finished goods revenue in FY26, devices 14.53% and other products, largely X-ray systems, 11.49%.

•    Test kits are single-use, room temperature stable and comprise a disease-specific chip, a cartridge and reagents, so no cold chain is needed. As of March 2026 the company covered 30 diseases through 43 assays. TB kits were 70.20% of finished goods revenue at 982 cr and 96.02% of kit units. Hepatitis B, HLA-B27, Hepatitis C, influenza, dengue and HPV together contributed 52.8 cr.

•    Customers are concentrated in public health programmes such as NTEP, NACO and NVHCP. Indian central government was 56.52% of finished goods revenue in FY26, state governments 23.29% and international aid agencies 4.75%, taking government-linked revenue to 84.56%. India was 90.38% of revenue, with Nigeria, Peru and Indonesia the largest export markets.

•    Key inputs are substrates, primers and probes, enzymes, dNTP, electronic components and chemicals. Imports were 42.01% of raw material purchases in FY26, sourced from South Korea, Switzerland, Denmark and Singapore. Six manufacturing units operate on leased land, two in Goa and one each in Visakhapatnam, Peenya, Machohalli and Pune. Installed capacity is 5,400 devices and 39,000,000 test kits a year. FY26 utilisation was 42.30% for devices and 58.25% for kits, against 58.89% and 43.44% in FY25.

•    R&D is carried out by wholly owned subsidiary Bigtec in Bengaluru, which owns the micro-PCR intellectual property and licenses it to the company for a royalty of 10% of revenue, 123 cr in FY26.

•    Government sales are won through tenders and routed through 114 domestic distributors, supported by 28 international distributors and a 346-member sales team. The group has five subsidiaries and one associate.

Promoters and Leadership

•    Molbio was founded in Goa in 2000 by Sriram Natarajan, who had earlier built Tulip Diagnostics (sold it to PerkinElmer in 2017). Co-founder Dr. Chandrasekhar Bhaskaran Nair separately founded the R&D arm Bigtec and won the Infosys Prize 2021 for Truenat. Both remain executive directors, aged 67 and 58.

•    Six promoters hold 46.65% pre-offer. Only Dr. Chandrasekhar Nair holds shares directly, at 5.42%; the remaining 41.23% sits in Exxora Trading LLP, the family office in which Natarajan, his wife, son and daughter are equal partners.

•    The company has had three CFOs since March 2024, with the incumbent Manan Khokhani appointed on December 22, 2025, two months before the FY26 year end. All three independent directors joined between November 2024 and January 2025, and all three investor nominee directors resigned in August 2025.

Shareholding Pattern

•    Promoters hold 46.65% and will hold 43.01% post-offer. Non-promoter institutional holders are India Business Excellence Fund III at 12.66% and V Sciences Investments (Temasek) at 8.93%. Public shareholding post-listing will be 10.10%, so the company must reach 25% within three years of listing.

Issue Details

Fresh issue size - Amount → 200 cr ; To be utilized in -

•    Setting up infrastructure for a research and development facility and Centre of Excellence at Yeshwanthpur, Bengaluru, to be operated by wholly owned subsidiary Bigtec, and connected office space → 105 cr

•    Purchase of plant, machinery and equipment for automation at Goa Unit I, Goa Unit II and the Visakhapatnam unit → 72.3 cr

•    General Corporate Purposes & Others

Offer For Sale size - Amount → 740 cr ;

•    Promoter Exxora Trading LLP will sell 3.9% of its pre-IPO shareholding and promoter Dr. Chandrasekhar Bhaskaran Nair 20% of his, taking the combined promoter stake from 46.65% to 43.01%.

•    India Business Excellence Fund III will sell 7% of its holding, moving from 12.66% to 11.52%. V Sciences Investments (Temasek) is not selling any shares and stays at 8.74% post-offer.

Financials