Blue Jet Healthcare IPO: Subscription Details, GMP, Price Band, and 10 Key Insights

Blue Jet Healthcare IPO: The initial public offering (IPO) of Blue Jet Healthcare Limited commenced on Wednesday, October 25 and is scheduled to conclude on Friday, October 27. On the first day of tendering, 69% of the Blue Jet Healthcare IPO was subscribed. The Blue Jet IPO was 78% subscribed by retail investors, 1.37 times subscribed by NIIs, and only 1% subscribed by Qualified Institutional Buyers (QIBs).

On Monday, October 23, Blue Jet Healthcare’s initial public offering (IPO) garnered a total of ₹252.08 crore from 22 investors participating in an anchor book process.

The floor price for Blue Jet Healthcare’s initial public offering is 164.50 times the face value of the equity shares, while the cap price is 173 times the face value. Based on diluted earnings per share (EPS), the price to earnings ratio for fiscal year 2023 is 35.64 times at the floor price and 37.49 times at the cap price.

Blue Jet Healthcare is an intermediary corporation specializing in the distribution of healthcare and pharmaceutical ingredients. Blue Jet Healthcare was an innovator in the manufacturing of saccharin and its derivatives, which are synthetic sweeteners, in India.

According to Blue Jet Healthcare’s Red Herring Prospectus (RHP), no publicly traded company in India operates in a sector analogous to its own.

Among the significant hazards outlined in the company’s Red Herring Prospectus (RHP) is its reliance on a limited number of critical clients for product sales. A decline in client demand, the disappearance of one or more of these clients, or a worsening of their financial situation or future prospects could all have a negative impact on the organization’s operations, finances, and cash flows.

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Blue Jet Healthcare IPO: Subscription Details, GMP, Price Band, and 10 Key Insights

Here are ten essential details regarding the Blue Jet Healthcare IPO:

• Status of Blue Jet Healthcare IPO subscriptions on day two: At 11:33 IST, the subscription status for Blue Jet’s IPO was 91%. The retail segment was sold out.
• The price band for Blue Jet Healthcare’s (IPO) has been established at ₹329 to ₹346 per equity share, which has a face value of ₹2.
• The lot size for the Blue Jet Healthcare IPO is 43 equity shares, with subsequent lots being comprised of multiples of 43 equity shares.
• According to RHP, the Blue Jet Healthcare IPO is an offer for sale (OFS) of 24,285,160 equity shares with no new issue component. The magnitude of Blue Jet Healthcare’s IPO is ���840.27 crore.
• Promoters of the Blue Jet initial public offering are Archana & Akshay Arora, Akshay Bansarilal Arora, and Shiven Akshay Arora. Akshay Bansarilal Arora will sell a maximum of 18,366,311 equity shares, whereas Shiven Akshay Arora will sell 5,918,849 equity shares.
• Specifics of the Blue Jet IPO listing date and allotments: The finalisation of the Blue Jet IPO basis for share allocation is anticipated to occur on Wednesday, November 1. Subsequently, refunds will commence on the same day. On Friday, November 3, the shares will be deposited into the demat accounts of the allottees. On Monday, November 6, Blue Jet Healthcare IPO shares are anticipated to be listed on both the BSE and NSE. In the event that the organization opts to transition to the T+3 standard, the dates will be advanced.
• Lead Manager and Registrar of Blue Jet Healthcare IPO: Kotak Mahindra Capital Company Limited, ICICI Securities Limited, and J.P. Morgan India Private Limited are the book running lead managers for the Blue Jet Healthcare IPO. The offering is registered with Link Intime India Private Ltd.
• Blue Jet Healthcare IPO reservation: Qualified institutional buyers (QIB) have been allocated a minimum of 50% of the shares in the public offering, non-institutional investors (NII) have been allocated 15%, and retail investors have been allocated 35%.
• Blue Jet Healthcare IPO GMP today, or the grey market premium, is +34, which is comparable to the previous session’s premium. According to investorgain.com, this indicates that Blue Jet Healthcare shares were trading at a premium of 34 on the grey market on Thursday.
• Based on an analysis of the current premium in the gray market and the upper end of the IPO price band, an estimated listing price of ₹380 per share for Blue Jet Healthcare was determined. This represents a 9.83% increase over the IPO price of ₹346.0.
• Blue Jet IPO Analysis: “Blue Jet Healthcare’s manufactured products have established a specialized position on international markets, and the company maintains enduring partnerships with high-profile clients and FMCG companies.” It is actively expanding its capacity and aims to enhance its performance in the upcoming years. Based on annualized earnings for FY24, the issue seems to be priced at its maximum. “Investors may park funds in this long race horse for medium to long-term returns,” said Chittorgarh contributing editor Dilip Davda.

Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, asserts that the initial public offering (IPO) of Blue Jet Healthcare provides investors with the chance to stake in a specialty pharmaceutical company that supplies niche products to pharmaceutical innovators. Since the company has been making contrast media intermediates for 20 years and specializes in complex chemistry, it has made it very hard for competitors to get into niche product categories like high-intensity sweeteners and contrast media intermediates.

“We also believe Blue Jets long standing relationships and multi-year contracts with multinational clients helps them to take care not only of the long term supply contracts but also to manage the warehousing and logistics for their customer.

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Based on an examination of the financial statements, Blue Jets experienced robust growth in FY 2022 but sluggish growth in FY 2023, with revenue/profit after taxes increasing by 37%/34% in FY 2022 and -5.49%/-12% in FY 2023.

Based on annualized earnings and fully diluted post-IPO paid-up capital, the issue is valued at an upper price band of ₹346/-. It is seeking a market capitalization of ₹6002 crore and a price-to-earnings ratio of 34x on a consolidated basis. Considering the revenue and profit growth, it can be inferred that the issue is fully priced-in. Given the company’s presence in a niche product segment and the absence of immediate competitors to compare it to, the issue may generate demand as a result of the first mover advantage, which could lead to respectable listing gains. Tapse further stated, “With a reasonable listing gain perspective, we advise long-term investors to “SUBSCRIBE WITH RISK” in the Blue Jet IPO offer, given that the 100% OFS issue is a concern for new investors.