Modern Diagnostic & Research Centre Limited IPO – SME Board
About the Company
Modern Diagnostic & Research Centre Limited (MDRC), founded in 1985 and headquartered in New Delhi, is a diagnostic services company offering comprehensive pathology (blood/urine tests) and radiology (imaging like X-rays, ultrasound, CT, MRI) services. Think of them as a “one-stop diagnostic shop”—instead of going to different labs for tests and different centers for imaging, patients get everything under one roof.
IPO Details Table
| Detail | Explanation | Data |
|---|---|---|
| IPO Opening Date | Buy shares from | 31 Dec 2025 |
| IPO Closing Date | Last date to apply | 2 Jan 2026 |
| Price Band | Price range for shares | ₹85 – ₹90 per share |
| Issue Price (Final) | Final price fixed | ₹90 per share |
| Lot Size | Min. shares to buy | 1,600 shares (~₹1,44,000 at price ₹90) |
| Min. Investment (Retail) | Minimum amount required | ₹2,88,000 (2 lots = 3,200 shares) |
| Total Issue Size | Max money raised | ₹36.89 Crore |
| Fresh Issue | New shares, money goes to company | ₹36.89 Crore (40.99 lakh shares = 100%) |
| Offer for Sale (OFS) | Old owners sell shares | Nil (Zero OFS) |
| Listing Date | Shares start trading | 7 Jan 2026 (BSE SME) |
| Face Value | Company unit value | ₹10 per share |
| Registrar | Share allocation handler | MUFG Intime India Pvt Ltd |
| Book Manager | IPO arranger | Spread X Securities Pvt. Ltd. |
What Will the IPO Money Be Used For?
The company is raising ₹36.89 Crore (Fresh Issue, 100% goes to company) to use for:
- Medical Equipment Purchase: ₹20.69 Cr to buy advanced diagnostic equipment (MRI, CT scanners, ultrasound machines, lab analyzers).
- Working Capital: ₹8.00 Cr for daily operations, buying reagents, consumables, staff salaries.
- Debt Repayment: ₹1.00 Cr to pay off existing loans.
- General Corporate Purposes: Remaining amount for other needs.
Note: 100% Fresh Issue = All money goes to company (no OFS). This is very bullish as promoters are investing fresh capital, not exiting.
IPO Timeline
| Event | Date | What Happens |
|---|---|---|
| IPO Opens | 31 Dec 2025 | Start buying shares |
| IPO Closes | 2 Jan 2026 (5 PM) | Last date to buy shares |
| Allotment Date | 5 Jan 2026 | Find out if you got shares |
| Refunds Issued | 6 Jan 2026 | Get money back if not allotted |
| Shares to Demat | 6 Jan 2026 | Shares show in account |
| Listing Date | 7 Jan 2026 | Market trading starts on BSE SME |
Business Model & Revenue Structure
How They Make Money:
- Pathology Tests: Blood tests, urine tests, cultures (~75% of revenue). Charge ₹200-5,000+ per test.
- Radiology Services: Ultrasound, CT scans, MRI, X-rays (~25% of revenue, but high-margin). Charge ₹500-20,000+ per scan.
- Corporate Contracts: Employee health check-ups for companies (bulk, recurring revenue).
- Hospital B2B: Outsourced lab services to hospitals and clinics.
Service Mix:
- Current Revenue Mix: ~75% Pathology, ~25% Radiology
- Target Future Mix: ~60% Pathology, ~40% Radiology (radiology has higher margins)
Key Financial Metrics (Simple Numbers)
| Metric | FY23 | FY24 | FY25 | Q1 FY26 (Jun-Sep '25) | Trend |
|---|---|---|---|---|---|
| Revenue | ₹56.28 Cr | ₹67.13 Cr | ₹77.95 Cr | ₹22.67 Cr (annualized ~₹90 Cr) | Growing 15% YoY |
| EBITDA | -₹0.99 Cr | ₹11.05 Cr | ₹17.96 Cr | Strong | Operating profit up 64% |
| EBITDA Margin | Negative | 16.5% | 23.04% | 23%+ | Margin expanding |
| Net Profit (PAT) | ₹-5.73 Cr | ₹5.79 Cr | ₹8.97 Cr | ₹3.00 Cr (Q1) | Profit up 55% YoY |
| PAT Margin | Negative | 8.6% | 11.51% | 13.2% | Improving margins |
| ROE | Negative | 3.3% | 37.8% | 55.21% | Excellent |
| ROCE | Negative | ~6% | ~30% | 36.18% | Strong capital returns |
| Debt-to-Equity | High | 1.06 | 1.07 | Moderate | Debt still high |
| RoNW (Return on Net Worth) | — | — | 37.8% | 43.27% | Elite returns |
Key Points:
- Turnaround Story: From ₹-5.73 Cr loss (FY23) to ₹8.97 Cr profit (FY25).
- Margin Explosion: EBITDA margin improved from negative to 23% in 2 years.
- Profit Growth: 55% PAT growth in FY25, continuing strong in Q1 FY26.
- Elite Returns: ROE 55%, RoNW 43% (exceptionally high).
- Debt Concern: D/E of 1.07 is moderate-to-high; IPO proceeds will help reduce this.
Cost of Acquisition – For Promoters
- Promoters: Not explicitly named (family-owned company since 1985).
- Acquisition Cost: Company founded in 1985 with initial capital ~₹1-2 crore.
- Current Valuation: ₹135.89 crore market cap at IPO price (₹90).
- Promoter Gain: Approximately 65-135x returns over 40 years.
Employee Cost Ratio
- Employee Cost (FY25): ₹19.67 Cr
- Revenue (FY25): ₹77.95 Cr
- Employee Cost to Revenue: 25.2% of revenue
- Employees: 616 (including doctors and consultants)
This is typical for diagnostic/healthcare companies where qualified staff (doctors, technicians) are expensive. 25% is reasonable.
Growth Drivers:
- Aging population and rising diseases (diabetes, heart disease, cancer)
- Rising income and health awareness
- Government health schemes (Ayushman Bharat drives diagnostics)
- Corporate health programs expanding
- Hub-and-spoke model reducing operational costs
Growth & Strengths (“Biggest Tricks”)
- Hub-and-Spoke Model: MDRC operates a low-cost, asset-light model. Main labs in cities; small collection centers in smaller towns. This keeps capex low while expanding reach.
- Integrated Pathology + Radiology: Unlike competitors who focus on only one, MDRC does both. This attracts customers who prefer “one-stop” diagnostics.
- Margin Expansion Visible: EBITDA margin jumped from 16.5% to 23% in one year. As they scale (more tests per center), margins expand (fixed costs spread).
- Turnaround Story: From losses to 55% profit growth in 2 years shows improving operational efficiency.
Key Risks & Concerns ( Read Carefully)
| Risk | Why It Matters | Impact |
|---|---|---|
| SME Liquidity Risk | SME IPOs have very low trading liquidity | Hard to sell shares quickly; wide bid-ask spreads |
| High Debt | D/E of 1.07 is moderate-to-high | Interest costs drain 2.4% of revenue; leverage risky |
| Intense Competition | Diagnostic Labs India (DLI), Metropolis, Thyrocare | Price wars could compress margins |
| Corporate Client Risk | If major corporates shift to cheaper providers | Revenue could fall suddenly |
| Working Capital Heavy | Tests require upfront inventory & staff costs | Cash tied up in operations |
| Small Regional Player | Only 21 centers in 8 states | Limited scale vs national chains |
| Recent Profitability | Only just turned profitable (FY24 onwards) | Profitability sustainability uncertain |
| Expensive Valuation | P/E ~11x but P/BV 4.17x is premium | Stock may fall 15-20% post-listing |
IPO FAQS
What is an IPO?
- An IPO (Initial Public Offering) is when a private company sells its shares to the public for the first time to raise money.
- Example: If a well-known pizza company wants to grow, it can list its shares on the stock exchange so anyone can buy a piece of the company.
How can you apply for an IPO (using Zerodha or Upstox)?
- Make sure you have a Demat account and your bank account is linked.
- Steps:
- Log in to your broker’s app (e.g., Zerodha Kite, Upstox).
- Go to the IPO section.
- Select the company’s IPO you want to apply for.
- Enter how many shares (or ‘lots’) you want and the price you wish to bid.
- Enter your UPI ID, submit your application, and approve the UPI payment request.
How are IPO shares allotted?
- If more people want shares than are available, the company uses a lottery system to decide who gets them.
- If you don’t get shares, your money is simply returned.
What is GMP (Grey Market Premium)?
- GMP shows the extra price people are willing to pay for IPO shares before they officially start trading.
- Example: If IPO price is ₹100 and GMP is ₹20, people are unofficially ready to pay ₹120. It hints at the IPO’s popularity but isn’t a guarantee.
Where to check upcoming IPOs (IPO calendar)?
- Visit popular finance sites like Chittorgarh, IPOWatch, or official exchange websites (NSE, BSE) and look for the “Upcoming IPO” section.
What are IPO listing gains?
- If the share’s price rises on the first trading day, you can make instant profit.
- Example: You buy at ₹150, and it opens at ₹200, you gain ₹50 per share.
How can you make profit from an IPO?
- Quick gains on listing day (if the stock price goes up).
- Long-term: If the company grows, the share price could increase further.
Which IPO is best to buy?
- There is no single best IPO. Check the company’s background, current demand, and GMP, but always research before investing.
- High GMP or popularity doesn’t guarantee profits.
Are IPOs safe?
- IPOs can be profitable but also risky; prices can go up or down sharply.
- Only invest if you are ready for potential losses.
How to check IPO allotment status?
- After the IPO process, check on exchanges (BSE/NSE websites) or the IPO registrar’s site (like K-Fintech, Bigshare,or mufg-intime) by entering your PAN or application number to see if you got shares.
Important Tips for Retail Investors Applying for an IPO
- Use Only Your Own PAN Card:
Avoid using the same PAN card for multiple IPO applications. For example, if you have already applied using your PAN for one IPO, don’t try to apply again with the same PAN under different accounts or through others. - Apply in the Right Category:
Ensure you select the correct investor category (such as Retail Individual Investor) when filling out your application. Applying under a wrong category can lead to rejection or disqualification. - Maintain Sufficient Bank Balance:
Before applying, ensure your bank account linked to the application has enough funds to cover the full bid amount. For instance, if the IPO application requires a payment of ₹15000, make sure your account holds at least that amount. - Use Your Own Bank Account:
Always apply through your own bank account. Using someone else’s account can cause your application to be rejected during the verification process. - Avoid Last-Minute Applications:
Don’t wait until the deadline day or moments before to apply. Last-minute submissions may face technical glitches or processing delays, reducing the chances of success.