Blue Jet Healthcare’s IPO Receives Good Investor Interest on Day 1
The initial public offering (IPO) of Blue Jet Healthcare, a pharma intermediates manufacturer, has garnered significant interest from non-institutional and retail investors on its first day. The IPO, which is a complete offer-for-sale, has received subscriptions of 69% by the end of the day.
The non-institutional investor portion of the ₹840 crore IPO was fully subscribed, while the retail portion saw a subscription rate of 78%. However, the qualified institutional buyer (QIB) portion received minimal bids on the first day, which is a common trend.
The IPO has a price band set at ₹329-346 per equity share, and the company will not receive any proceeds from the share sale. The offer will be open until October 27, and investors can bid for a minimum of 43 shares, with multiples thereof.
Kotak Mahindra Capital, ICICI Securities, J P Morgan India are the book running lead managers, and Link Intime India is the registrar to the offer. The equity shares are proposed to be listed on BSE and NSE.
According to data from BSE, the subscription rates for different types of investors are as follows:
– Qualified Institutional Buyers (QIBs): 0.01 times subscribed
– Non-institutional investors (NIIs): 1.37 times subscribed
– Retail investors: 0.78 times subscribed
– Total: 0.69 times subscribed
Blue Jet Healthcare, originally incorporated as Jet Chemicals in 1968, is promoted by executive chairman Akshay Bansarilal Arora. The company operates under the brand name Blue Jet and specializes in the manufacturing of contrast media intermediates, high-intensity sweeteners, salts, and active pharmaceutical ingredients (APIs). It has developed over 100 products, with more than 40 products already in the market.
As of June 30, 2023, Blue Jet Healthcare operates three manufacturing facilities located in Shahad, Ambernath, and Mahad in Maharashtra. In terms of financial performance, the company reported a revenue of ₹721 crore in FY23, ₹683 crore in FY22, and ₹498 crore in FY21. Its consolidated profit after tax (PAT) stood at ₹160 crore in FY23, ₹181 crore in FY22, and ₹135 crore in FY21.
Analysts praise Blue Jet Healthcare for its presence in niche categories with high entry barriers and its capabilities in product development and process optimization. The company also has established relationships and long-term contracts with multinational clients for both supply agreements and logistics management.
At the upper price band, the company is valued at a price-to-earnings (P/E) ratio of 34x, with a market capitalization of ₹6,001 crore after the issue of equity shares. Anand Rathi recommends a “subscribe-long term” rating to the IPO, stating that the valuations are fair.
Rajan Shinde, a research analyst at Mehta Equities, believes that the issue is fully priced but highlights Blue Jet’s unique niche product segment and lack of direct competitors as factors that may attract demand and potentially lead to significant listing gains. Mehta Equities recommends subscribing to the Blue Jet IPO with a risk perspective, anticipating decent listing gains.
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