Blue Jet Healthcare’s initial public offer subscribed 7.9x

• The ₹840 crore IPO of Blue Jet Healthcare received good interest from institutional investors on the last day.
• The IPO is a complete offer-for-sale wherein the company will not receive any proceeds from the share sale.

The initial public offer (IPO) of pharma intermediates manufacturer Blue Jet Healthcare was subscribed 7.9 times on the last day of the offer.

The ₹840 crore IPO received good interest from qualified institutional buyers (QIBs) on the last day as this portion was subscribed 13.7 times. The non-institutional investor portion was also subscribed 13.59 times.

The company has fixed the price band at ₹329-346 per equity share for the offer. The IPO is a complete offer-for-sale wherein the company will not receive any proceeds from the sale.

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.

Source: BSE

The company was incorporated in 1968 as Jet Chemicals, and is promoted by its executive chairman, Akshay Bansarilal Arora. It operates under the Blue Jet brand name and manufactures contrast media intermediates, high-intensity sweeteners, including saccharin, salts and active pharmaceutical ingredients (APIs).

It claims to have developed over 100 products with over 40 products commercialised.

As of June 30, 2023, it operates three manufacturing facilities, in Shahad, Ambernath, and Mahad in Maharashtra.

Source: Anand Rathi report

Analysts believe that Blue Jet Healthcare’s presence in niche categories have high entry barriers. They are also impressed with its product development and process optimisation capabilities.

It also has established relationships and multi-year contracts with multinational clients, not only for long-term supply agreements but also to handle warehousing and logistics.

“At the upper price band, the company is valued at P/E of 34x, with a market cap of ₹6,001 crore post issue of equity shares. We believe that valuations of the company is fairly priced and recommend a ‘subscribe- long term’ rating to the IPO,” said Anand Rathi.

Rajan Shinde, research analyst at Mehta Equities is of the opinion that the issue is fully priced. “However, Blue Jet's unique niche product segment and lack of immediate peers might attract demand based on a first-mover advantage, potentially leading to significant listing gains. While the 100% offer for sale (OFS) is a concern for new investors, Mehta Equities recommends subscribing to the Blue Jet IPO with a risk perspective, expecting decent listing gains,” he added.