Blue Jet Healthcare Limited IPO

Last Updated on October 25, 2023 by BFSLTeam BFSLTeam

Blue Jet Healthcare Limited is a science-led and global pharmaceutical firm headquartered in Mumbai. The company is a strategic partner for the development and manufacturing of advanced API and pharmaceutical intermediaries for many MNCs.

Owing to its consistent, timely and efficient delivery and marketing endeavours, this company has built long-standing relationships with customers. Recently, Blue Jet Healthcare Ltd. has received a nod from SEBI to go public with an initial public offering (IPO).

If you are planning to level up your investment journey, this blog is for you. Keep reading till the end to know about the upcoming Blue Jet Healthcare IPO.

About the Company

Blue Jet Healthcare Pvt Limited is a global, scientifically updated pharmaceutical company. Today, this company is a strategic partner focusing on collaborating and developing advanced-level pharmaceutical intermediates and API.

Since its establishment in 1968, Blue Jet Healthcare has followed the role of a Contract Development and Manufacturing Organisation. This firm focuses on manufacturing high-intensity sweeteners and contrast media intermediates with notable capabilities in complex chemistry. The company also manufactures saccharin and associated salts along with a diverse range of products.

According to its DRHP, this company served more than 350 customers in 35+ countries during the previous three financial years. Owing to its positive brand image since incorporation, this company also has strong customer retention capabilities.

Blue Jet Healthcare Limited’s range of products evolved with customer needs and multinational pharmaceutical companies. The product range of Blue Jet Healthcare Ltd. belongs to three broad segments. These are active pharmaceutical ingredients and pharma intermediates, contrast media intermediates, and high-intensity sweeteners. 

Blue Jet Healthcare Limited derives its revenue from the sale of products beyond geographical barriers. Its products thrive in the markets of Europe, India and the USA. The company owns three manufacturing facilities under its name. These units are in Ambernath, Shahad and Mahad. The World Health Organisation has recognised the Ambernath manufacturing facility for good and hygienic manufacturing practices. 

Now coming to finances, this company’s total income witnessed a drastic growth from Rs. 5,440.06 million in FY 2020 to Rs. 7,028.81 million in FY 2022. After considering tax deductions, its profits have also grown from Rs. 1,449.58 million in FY 2020 to Rs. 1,815.91 million in FY 2022.

IPO Details and Objectives

Blue Jet Healthcare Limited filed its preliminary papers to SEBI on September 2, 2022, with the plan to go public. The company plans to launch 2,16,83,178 equity shares as an offer for sale. The selling shareholders for this upcoming IPO are Shiven Akshay Arora and Akshay Bansarilal Arora.

As per its DRHP, the upcoming Blue Jet Healthcare Ltd. IPO is a book-built issue. It means you can buy these IPO shares at a price equal to or above the floor price. The face value of these shares is Rs. 2 per equity share. This company has not declared its floor price, cap price or the tentative timeline for its upcoming IPO.

As per recent updates, Blue Jet Healthcare Pvt Ltd. has received a nod from SEBI to go ahead with its IPO plan. As an entirely OFS IPO, the company will not earn any such net proceeds to fulfil corporate needs.

Also Read: How To Apply For An IPO?

Strengths

The points below throw light on the strengths of Blue Jet Healthcare Ltd. that you must know before planning to invest. 

• This company is a large and predominant manufacturer of intermediaries and contrast media in India.
• It manufactures, sells and markets products in a market with high entry barriers.
• Blue Jet Healthcare is known for its R&D, process optimisation and product development capabilities with an impressive track record of producing new intermediaries.
• The company has successfully maintained multi-year contracts with several globally recognised contrast media manufacturers. 
• The manufacturing facilities follow all the applicable regulatory norms and accreditations. 
• Blue Jet Healthcare Limited is run by an experienced and professional senior management team.  

Risks Associated

Besides the above strengths, you must also keep the following risks in mind before planning to invest in Blue Jet Healthcare Limited IPO. 

• An inability to market and sell new products promptly can affect the company’s business, operation and cash flow. 
• If the company cannot expand its production capacity, it can affect its customer relations and hurt revenue in the long run.
• Shutting down or slowing down any of this company’s manufacturing units can adversely impact the production and eventually the company’s cash flow. 

Outlook & Valuation

Regarding financial performance, BJHL reported total income and net profit of Rs. 507.81 Cr. / Rs.
135.79 Cr. (FT21), Rs. 702.88 Cr. / Rs. 181.59 Cr. (FY22), and Rs. 744.94 Cr. / Rs. 160.03 Cr. (FY23). It
generated a net profit of Rs. 44.12 Cr. on total revenue of Rs. 184.60 Cr. for the first quarter of FY24,
which concluded on June 30, 2023. The company has reported an average EPS of Rs. 9.44 and an
average RoNW of 30.01% for the last three fiscal years. Based on its NAV of Rs. 41.83 as of June 30,
2023, as well as post-IPO basis, the issue is priced at a P/BV of 8.27. Looking at the company’s
performance in the reported periods, we observe that it achieved profit after tax (PAT) margins of
27.22% in FY21, 26.57% in FY22, 22.20% in FY23, and 24.57% in Q1-FY24. Additionally, the Return on
Capital Employed (RoCE) for the corresponding prior periods was 7.97%, 6.67%, 31.91%, and 49.70%.
When we calculate the asking price based on the annualized earnings for FY24 in relation to the post IPO equity capital, the price-to-earnings (P/E) ratio stands at 34.02.

Summary

Every investor regardless of their experience must study the DRHP thoroughly before planning for an IPO investment. This document will also help you conduct a comparative analysis to make an informed decision. You must also know your financial standings and risk appetite before investing in Blue Jet Healthcare Limited’s IPO.

Also Read: Benefits of Investing in IPO

Blue Jet Healthcare Limited IPO FAQs