Modern Diagnostic & Research Centre Limited Makes Strong Debut with 10.56% Premium, Lists at ₹99.50 Against Phenomenal Subscription

Modern Diagnostic & Research Centre Limited, incorporated in 1985 as diagnostic chain offering comprehensive range of pathology and radiology services providing reliable diagnostic tests, home specimen collection, online reports, and customized test packages operating 21 centers including 18 labs and 3 diagnostic centers across 8 states offering ultrasound, CT, MRI, X-ray, ECG, PFT, and specialized labs for heart and neuro care, made a strong debut on BSE SME on January 7, 2026. After closing its IPO bidding between December 31, 2025 and January 2, 2026, the company commenced trading with a premium of 10.56% opening at ₹99.50.

Modern Diagnostic & Research Centre Limited Listing Details

Modern Diagnostic launched its IPO at ₹90 per share with minimum investment of 3,200 shares costing ₹2,88,000. The IPO received phenomenal response with subscription of 376.90 times - individual investors at 342.46 times, QIB at 193.51 times, NII at 702.08 times.

First-Day Trading Performance

Listing Price: Modern Diagnostic opened at ₹99.50 representing premium of 10.56% from issue price of ₹90.00, touched low of ₹94.54 (up 5.04%), with VWAP at ₹98.80, supported by phenomenal subscription of 376.90 times.

Growth Drivers and Challenges

Growth Drivers:

Strong Growth Trajectory: Revenue increased 15% and PAT surged 55% between FY24 and FY25, exceptional ROE of 55.21%, ROCE of 36.18%, RoNW of 43.27%, healthy PAT margin of 11.51%, strong EBITDA margin of 23.04%.

Comprehensive Service Platform: Diagnostic chain operating 21 centers across 8 states, comprehensive diagnostics provider delivering all-in-one solution at cost-effective prices, wide array of pathology tests including high-end molecular diagnostics, cytogenetics, and specialized panels.

Operational Excellence: Hub and spoke method enabling asset-light operations resulting in higher margins, centralized information technology platform, home blood sample collection services providing convenience, state-of-the-art equipment including 3-Tesla MRI and 128-slice CT scanner.

Strategic Positioning: Experienced promoter and management team, focus on quality and customer service, expansion spree across multiple states, established presence since 1985 providing brand recognition and trust.

Challenges:

Leverage Concerns: Debt-to-equity of 1.07, total borrowings of ₹22.09 crore increasing to ₹30.38 crore in H1-FY26 representing significant leverage increase, ₹1.00 crore of IPO proceeds for debt repayment.

Operational Risks: Significant promoter dilution from 99.99% to 72.85%, capital-intensive business requiring continuous investment in medical equipment, vulnerable to regulatory changes in healthcare sector and insurance reimbursement policies, geographic concentration in 8 states limiting diversification.

Utilisation of IPO Proceeds

Medical Equipment: ₹20.69 crore for funding capital expenditure for purchase of medical equipments for diagnostic center and laboratories representing majority of proceeds enhancing service capabilities.

Working Capital: ₹8.00 crore for funding working capital requirement supporting diagnostic operations and expansion.

Debt Repayment: ₹1.00 crore for repayment of certain outstanding borrowings.

General Corporate Expenses: ₹3.33 crore for general corporate expenses supporting operational needs.

Financial Performance

Revenue: ₹78.80 crore for FY25, growth of 15% from ₹68.67 crore in FY24, reflecting expanding diagnostic services operations across pathology, radiology, and home collection services.

Net Profit: ₹8.97 crore in FY25, growth of 55% from ₹5.79 crore in FY24, demonstrating strong profitability improvement and turnaround from loss of ₹5.73 crore in FY23.

Financial Metrics: Exceptional ROE of 55.21%, debt-to-equity of 1.07, ROCE of 36.18%, PAT margin of 11.51%, strong EBITDA margin of 23.04%, price-to-book of 4.78x, post-issue EPS of ₹7.94, P/E of 11.33x, borrowings of ₹22.09 crore increasing to ₹30.38 crore, and market capitalisation of ₹142.85 crore representing strong listing premium of 10.56% validating phenomenal subscription of 376.90 times with analyst stating issue appears reasonably priced for medium to long term investment.