Introduction:
Ever since the COVID-19 pandemic, investors have taken a lot of interest in the Initial Public Offerings (IPOs) of growing companies. More often than not, they have been rewarded with excellent returns. A pharmaceutical and healthcare ingredients manufacturing company – Blue Jet Healthcare Limited – recently announced its IPO, and will be launching it on 25 October 2023.
This article aims to provide a comprehensive overview of the Blue Jet Healthcare IPO, offering potential investors a clear understanding of what to expect from this public issue, and decide if they should invest in it or not.
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About Blue Jet Healthcare
Incorporated in 1968, Blue Jet Healthcare Limited is a global pharmaceutical and healthcare ingredient manufacturing and intermediary company. The company’s products can be fragmented into three distinct categories – contrast media intermediates, high-intensity sweeteners, and Active Pharmaceutical Ingredients (APIs).
Over the years, the company has established a significant presence in the healthcare industry, ranging across hospitals and clinics to diagnostic centers and telemedicine. Some top clients of the company include GE Healthcare AS, Guerbet Group, Bracco Imaging SpA, Colgate-Palmolive, Unilever India, Prinova US LLC, and MMAG Company.
Strengths of the Company
Below are the key strengths of Blue Jet Healthcare Ltd. as stated in its Draft Red Herring Prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI):
- It is India’s largest manufacturer of contrast media intermediaries
- Largest manufacturer of saccharine sodium in India with 3,000 metric tonnes annual capacity
- It has more than 24 years of manufacturing experience in its field
- Operates in an industry with high entry barriers
- There are no listed companies with similar business as that of the company
- Established relationships and long-term contracts with major clients across the globe
- Boasts excellent in-house research and development (R&D) capabilities
- All three manufacturing facilities have regulatory accreditations
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Key Weaknesses Highlighted
Key weaknesses or risks associated with Blue Jet Healthcare Ltd. include:
- A significant portion of the revenue comes from the top ten clients
- The company is highly dependent on the European and US markets for its revenues
- Profits are subjected to fluctuations in currency exchange rates
- The company has to abide by several government regulations
- Disruptions in the supply of raw materials may impact the business
Core Financials of Blue Jet Healthcare Ltd.
Financials of the issuing company play a crucial role for investors to make investing decisions. The table below portrays key financials of Blue Jet Healthcare Ltd. as per its RHP on the SEBI website dated 17 October 2023:
*Amount in Crores
As you can conclude from the table above, the company’s net worth has grown considerably from Rs. 340 crores in FY21 to Rs. 681 crores in FY23. However, the profits have been erratic, reflecting the unpredictable nature of the API business.
The ROE and ROCE are highly impressive, justifying the IPO valuation. Factors like zero borrowings and constantly improving revenues make this company an attractive proposition for investors.
Details of the IPO
Blue Jet Healthcare IPO opens for public subscription on Wednesday, 25 October 2023, and closes on Friday, 27 October 2023. The issue will be an entire offer for sale of up to Rs. 840.27 crores. The company has reserved 50% of the issue for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 35% for retail investors.
Retail investors can apply for at least 43 shares (and in multiples thereof) in the price band of Rs. 329 to Rs. 346 per share. More details of the IPO are mentioned in the table below:
The final word
Considering the potential in the healthcare industry and the company’s growing prowess, it makes sense to invest in the Blue Jet Healthcare IPO. But you should conduct thorough research, and consider your financial goals and risk tolerance before making investment decisions. Should you need a Demat account to invest in IPOs and stocks, you can open it for free with Motilal Oswal.
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