Blue Jet IPO: Bidding ends today, should you subscribe or not?
On day 1, Blue Jet Healthcare IPO was subscribed 69%, where the retail investors portion was subscribed 78%, NII portion was subscribed 1.37 times, and Qualified Institutional Buyers (QIB) portion was booked 1%.
Blue Jet Healthcare IPO price band has been fixed in the range of ₹329 to ₹346 per equity share of face value of ₹2.
Blue Jet Healthcare IPO has reserved not more than 50% of the shares in the public issue for Qualified Institutional Buyers (QIB), not less than 15% for Non Institutional Investors (NII), and not less than 35% of the offer is reserved for Retail Investors.
“Exciting news! Mint is now on WhatsApp Channels ???? Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Blue Jet Healthcare IPO details
Blue Jet Healthcare IPO is completely a offer for sale (OFS) of 24,285,160 equity share; there is no fresh issue component, according to Red Herring Prospectus (RHP). Blue Jet Healthcare IPO size is ₹840.27 crore.
The company’s promoters are Shiven Akshay Arora, Akshay Bansarilal Arora, and Archana & Akshay Arora.
Shiven Akshay Arora will sell up to 5,918,849 equity shares, while Akshay Bansarilal Arora will sell up to 18,366,311 equity shares.
Also Read: Blue Jet Healthcare IPO: Check GMP, subscription status on day 2, apply or not?
The book running lead managers for the Blue Jet Healthcare IPO are Kotak Mahindra Capital Company Limited, ICICI Securities Limited, and J.P. Morgan India Private Limited. The registrar for the offering is Link Intime India Private Ltd.
Blue Jet IPO GMP today
Blue Jet Healthcare IPO GMP today or grey market premium was +10. On Thursday, Blue Jet Healthcare share price were trading at a premium of ₹34 in the morning, but drastically dropped to ₹2 in the evening, and settled at ₹10.
Today’s GMP indicates Blue Jet Healthcare share price were trading at a premium of ₹10 in the grey market on Friday, according to investorgain.com
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Blue Jet Healthcare share price was indicated at ₹356 apiece, which is 2.89% higher than the IPO price of ₹346.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Blue Jet IPO Review
“We like Blue Jet given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The IPO is valued at 34x Q1FY24 P/E on an annualized basis. We believe the company could benefit from the planed capacity expansion and sector tailwinds. Hence, we recommend Subscribe to the IPO,” said the brokaerage in the report.
Reliance Securities
The brokerage claims that Blue Jet Healthcare is one of the cutting edge businesses in specialised markets, with over 20 years of experience, specific chemical skills, and specialised R&D labs to provide a range of goods in highly concentrated contrast media formulations. Going forward, the management is implementing a sensible strategy of diversifying revenues, with a focus on exports and a high-margin product mix.
“The increased expansion over the next 2 years for envisaged increase in demand and leveraging the customer relationships for pharma intermediates and API categories will boost earnings over the next few years. We recommend a SUBSCRIBE to the issue,” said the brokerage.
Also Read: Blue Jet Healthcare IPO: GMP, subscription status, review, other details. Apply or not?
Nirmal Bang
Blue Jet Healthcare has a solid track record of overall performance, according to the brokerage’s analysis. Topline growth was robust, growing at a 10% CAGR between FY20 and FY23 and 24% on a year-over-year basis in Q1FY24. With the exception of FY23, when it recorded an EBITDA margin of 30.4% due to an increase in raw material prices and labour costs, it has consistently produced high operating margins of more than 35%.
On the other hand, Q1FY24 saw improvement due to a slowdown in the price of raw materials and other costs. We are unable to compare Blue Jet Healthcare with exact peers since there are no identified businesses that operate in a similar capacity to it, the brokerage explained.
“However, we have done peer comparison with the set of companies having strong financials in pharmaceutical industry. Company’s ROE and ROCE for FY23 stood at 23.5% and 32.0% are slightly better compared with the average rate of peer performance of 23.3% and 30.2%, respectively. The issue is valued PE valuation of 33.9x based on Q1FY24 annualized EPS which appears reasonable when compared with an average valuation of selected peers of 34.3x. Thus, we recommend SUBSCRIBE to the issue,” the brokerage said.
Choice Equity Broking
The brokerage claims that Blue Jet Healthcare is primarily a Contract Development and Manufacturing Organisation (CDMO), accounting for about 75% of its total revenue. It has a specialised product line and has built enduring relationships with its customers over the course of its business. Because of this, it can now generate almost 70% of its entire revenue from long-term contracts with these kinds of clients.
The company claimed significant commercial growth in FY20–23, but rising raw material costs had an adverse effect on profitability. Despite a threefold increase in net wealth, RoE was strong. In the future, Blue Jet Healthcare will profit from lower/stabilizing raw material prices as well as continued demand for its products. It has planned a number of brownfield and new construction projects, raising installed capacity by roughly 50% over FY25E.
Also Read: Blue Jet Healthcare IPO: Five customers drive 76% of company’s revenue
“There are no comparable peer having product and business operations similar to Blue Jet Healthcare. The above peers are considered only to benchmark the demanded valuation. At higher price band, Blue Jet Healthcare is demanding a TTM P/E multiple of 34x (to its TTM EPS of Rs. 10.2), which is at discount to the adjusted peer average. Thus considering the above observations, we assign a “SUBSCRIBE” rating for the issue,” the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
“Exciting news! Mint is now on WhatsApp Channels ???? Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
Download The Mint News App to get Daily Market Updates.
Updated: 27 Oct 2023, 09:48 AM IST
