Blue Jet Healthcare IPO subscribed 37% in four hours; NIIs & retailers lead bidders

The initial public offering (IPO) of Blue Jet Healthcare saw a decent response from the investors during the first day (Day 1) of the bidding process, thanks to retailers and HNI investors. The issue had opened for subscription on Wednesday, October 25.

Blue Jet Healthcare, a pharma company, is selling its shares in the range of Rs 329-346 apiece with a lot size of 43 shares. The IPO is entirely an offer-for-sale (OFS) of up 24,285,160 shares by its promoters to raise up to Rs 840.27 crore. The company will not receive any proceeds from the IPO.

According to the data, the investors made bids for 63,50,627 equity shares, or 37 per cent , compared to the 1,69,99,612 equity shares offered for the subscription by 1.45 pm on Wednesday, October 25. The three-day bidding for bidding on Friday, October 27.

The portion reserved for retail investors was subscribed 49 per cent, while the allocation for non-institutional investors (NIIs) saw a subscription of 60 per cent. The quota set aside for qualified institutional bidders (QIBs) was yet to attract any bids as of the same time.

Blue Jet Healthcare is a global pharmaceutical company and healthcare ingredient player, and an intermediate company. It initially was a saccharin and (artificial sweeteners) its salts maker in India but later expanded into contrast media intermediates, which are used in CT scans and MRIs.

A majority of the brokerages, which track the issue, remain positive on it and have a subscribe rating. They are positive on its debt free status, growth prospects, niche business models and sound financial over the year. However, the company has no comparable peers.

Blue Jet Healthcare is a large manufacturer of contrast media intermediates in India with presence in niche categories with high barriers to entry and a strong product development and process optimization capabilities with a focus on sustainability with longstanding relationships and multi-year contracts with multinational customers, said Anand Rathi Research.

"At the upper price band, the company is valuing at P/E of 34 times, EV/EBITDA 27 times with a market cap of Rs 6,002 crore post issue of equity shares. We believe that valuations of the company are fairly priced and recommend a 'subscribe for long term' rating to the IPO," she said.

ICICI Securities, JP Morgan India and Kotak Mahindra Capital Company are the book running lead managers for the IPO while Link Intime India is the registrar for the issue. Shares of the company will be listed on both BSE and NSE.  Blue Jet Healthcare raised Rs 252.08 crore from 22 anchor investors on Monday by allocation of 72,85,548 shares at a price of Rs 346 apiece.

Blue Jet is a niche player with specialized chemistry capabilities in contrast media intermediates and high-intensity sweeteners. The company has the benefit of high entry barriers and a long-term relationship with multinational customers. The company has also reported consistent financial growth except in FY2023, when there was decline in its profitability, said Swastika Investmart.

"As it has global exposure, the company faces risks related to quality control and market regulations. Although the company does not have any listed peers, the issue is coming at a P/E valuation of 37.48 times, which seems fairly priced. So, after considering all the factors, we recommend a 'subscribe' rating for this IPO," it added.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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