Blue Jet Healthcare’s IPO Receives Strong Investor Interest on Day 1
The initial public offering (IPO) of Blue Jet Healthcare, a pharma intermediates manufacturer, received significant attention from non-institutional and retail investors on its first day. The IPO, valued at ₹840 crore, is a complete offer-for-sale, meaning the company will not receive any proceeds from the share sale.
By the end of the first day, the IPO was subscribed 69%. The non-institutional investor portion 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 initial day, a common occurrence.
The price band for the offer has been set at ₹329-346 per equity share. The IPO will close on October 27, and investors can bid for a minimum of 43 shares and in 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 the BSE and NSE.
According to the BSE, the subscription figures by investor category 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 its executive chairman, Akshay Bansarilal Arora. The company operates under the brand name Blue Jet and specializes in manufacturing contrast media intermediates, high-intensity sweeteners, salts, and active pharmaceutical ingredients (APIs). It boasts a product portfolio of over 100 developed products, with 40 of them already commercialized.
As of June 30, 2023, Blue Jet Healthcare operates three manufacturing facilities in Shahad, Ambernath, and Mahad in Maharashtra.
In terms of financial performance, the company recorded a revenue from operations 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 appreciate the company’s presence in niche categories that have high entry barriers. They also commend Blue Jet Healthcare’s product development and process optimization capabilities. Furthermore, the company has established relationships and multi-year contracts with multinational clients for long-term supply agreements, as well as warehousing and logistics operations.
“We believe that valuations of the company are fairly priced and recommend a ‘subscribe-long term’ rating to the IPO,” stated Anand Rathi, in reference to Blue Jet Healthcare’s valuation at a price-to-earnings (P/E) ratio of 34x and a market capitalization of ₹6,001 crore post-issue of equity shares.
Rajan Shinde, a research analyst at Mehta Equities, considers the IPO to be fully priced. However, he suggests that Blue Jet Healthcare’s unique niche product segment and lack of immediate peers could attract demand based on a first-mover advantage, potentially leading to significant listing gains. Mehta Equities recommends subscribing to the Blue Jet IPO with a risk perspective, anticipating decent listing gains.
Overall, Blue Jet Healthcare’s IPO has seen strong interest from investors, particularly from non-institutional and retail segments. With its specialized product offerings and favorable market position, the company is poised for potential growth in the pharmaceutical intermediates industry.
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