Blue Jet Healthcare IPO Review: Blue Jet Healthcare Limited is coming up with the IPO which is set to be listed on the NSE and BSE. The IPO will be open for subscription on 25th October 2023 and closes on 27th October 2023. This article will provide a comprehensive review of the IPO, including an in-depth analysis of the company’s financials and the strengths and weaknesses of Blue Jet Healthcare. Keep reading for more details!
Blue Jet Healthcare IPO Review
About The Company
Blue Jet Health is a CDMO (contract development and manufacturing organization) that was founded in 1968. It produces and supplies specialty pharmaceutical and healthcare ingredients and intermediates, such as contrast media intermediates and high-intensity sweeteners.
It has three manufacturing facilities in Maharashtra, India, with a total annual capacity of 1020.90 KL. It serves more than 400 customers in 39 countries, including Colgate-Palmolive, Unilever, Prinova and MMAG. It has a stable revenue stream from its long-term contracts and strong customer relationships.
CONTRAST MEDIA INTERMEDIATES (REVENUE- 70.57%)- These are substances that improve the quality of medical images by making body tissues more visible under different imaging techniques, such as X-rays, CT, MRI or ultrasound. It provides a key intermediate and several advanced intermediates mainly to three of the world’s top contrast media producers.
HIGH INTENSITY SWEETENERS: (REVENUE- 24.48%)- This segment involves developing, manufacturing and marketing saccharin and its salts. These products are mainly used in table-top sweeteners, oral care products like toothpaste and mouthwashes, drinks, sweets, pharmaceutical products, food supplements and animal feeds.
PHARMA INTERMEDIATES AND API: (REVENUE- 4.73%)- This segment focuses on working with pharmaceutical companies to provide intermediates that are used as building blocks for APIs in chronic therapeutic areas, such as CVS, oncology and CNS, including new chemical entities.
The remaining 0.22% of revenue is generated from other income
REVENUE FROM GEOGRAPHICAL: The company’s revenue breakdown by region is as follows: Europe accounts for 74.49%, India for 13.94%, the USA for 4.88%, and other countries for 6.69%.
The global pharmaceutical market, valued at US$1,381.54 billion in June 2023, is driven by four factors: new and biologic therapies expansion into new regions and indications, demand for generics, and efforts to improve drug access.
Contrast media intermediates, mainly produced in India and China, are used to enhance medical imaging. The global contrast media market was worth US$5.9 billion in June 2023 and is expected to grow at 6-8% CAGR until 2025. High-intensity sweeteners are sugar substitutes used in various products.
The global market for these sweeteners was around US$3 billion in 2023 and is projected to grow at 6-7% CAGR over the next five years.
Pharmaceutical intermediates are the building blocks of pharmaceutical products which are synthesized into active pharmaceutical ingredients (APIs) and these APIs are then formulated into final pharmaceutical formulations such as tablets, and capsules.
The Indian API industry, which produces these intermediates, was worth INR 798 billion in 2020 and is forecasted to reach INR 1,307 billion by 2026, at a CAGR of 8.57%. -As of 2023 We did not have outstanding borrowings.
Blue Jet Healthcare IPO Review – Financial Highlights
Blue Jet Healthcare’s IPO reflects robust financial performance. Operational revenue soared from ₹498 crore in March 2021 to ₹720 crore in March 2023. Profit After Tax (PAT) also grew from ₹135 crore to ₹160 crore during the same period. The company’s net worth nearly doubled from ₹339 crore in 2021 to ₹681 crore in 2023.
The recent quarter saw a revenue of ₹179 crore and a profit of ₹44 crore. As of 2023, the company is debt-free.
It boasts a healthy Return on Equity (ROE) of 26.60% and a Return on Capital Employed (ROCE) of 31.91%, demonstrating efficient capital resource utilization.
(Source: RHP of the company)
Competitors of the company:
As per RHP of the company, There are no listed companies in India that engage in a business similar to Blue jet Healthcare.
Strengths of the company :
- Blue Jet Healthcare’s strength lies in its integrated production process, which guarantees quality and cost-effectiveness. It manufactures crucial intermediates for contrast media and is a supplier to top manufacturers like GE Healthcare AS, Guerbet Group, and Bracco Imaging.
- It operates in niche segments that have high entry barriers and complex chemistry requirements. It focuses on contrast media intermediate and high-intensity sweetener categories, where it has a strong market position and expertise.
- The company has long-term and stable relationships with multinational customers, including industry leaders in contrast media and tabletop sweeteners. It has been serving Colgate, Hindustan Unilever, and others for four to 24 years, giving it a competitive edge and customer loyalty.
- Strong product development and process optimization capabilities with a focus on sustainability. The company collaborates and enters into annual and multi-year supply contracts thus providing strong visibility and predictability of order book revenue
Weaknesses of the company:
- The company is heavily reliant on the speciality pharmaceutical and healthcare sectors, with a significant portion of its business coming from a small number of key customers. In fact, 81% of its revenue is generated from its top ten customers. Any loss or reduction in demand from these customers could negatively impact the business.
- A large portion of the company’s revenue, 80% to be precise, comes from exports to Europe and the US. Any slowdown in market growth or entry of new competitors in these regions could affect the company’s revenue.
- The company depends on third-party suppliers for raw materials, with its three largest suppliers in China, Norway, and India. Any increase in raw material costs could affect the company’s operations.
Blue Jet Healthcare IPO Review – GMP
As of October 19th 2023, The IPO for Blue Jet Healthcare is set at a price band of ₹329-₹346 per share. The latest grey market price stands at ₹101 The IPO is projected to list at a premium of 29.19%, with an estimated listing price of ₹477.
Key IPO Information
|IPO Size||840.27 Cr|
|Offer for sale||840.27Cr|
|opening date||25th october 2023|
|closing date||27th october 2023|
|face value||₹2 per share|
|price band||₹329 to ₹346 per share|
|lot size||43 shares|
|Minimum lot||1 (43 shares)|
|maximum lot||13 (559 shares)|
|listing date||6th November 2023|
Promoters: – Akshay Bansarilal Arora, Shiven Akshay Arora and Archana Akshay Arora are the promoters of the company.
Book Running Lead Manager: Kotak Mahindra capital company limited, ICIC securities limited, JP morgan India private limited.
Registrar to the Offer: Link Intime India Private Limited
The Objective of the Issue
The company will not receive any proceeds from the Offer and all the Offer Proceeds will be received by the Selling Shareholders, in proportion to the Offered Shares sold by the respective Selling Shareholders as part of the Offer.
As a global leader in advanced Contrast Media intermediates, Blue Jet Health Care is strategically focusing on patented drugs, investigational new drugs, and NCEs. With plans to enhance operational efficiency and expand production capacity, the company aims to meet growing customer demand.
Uniquely positioned in the Indian market without any direct competition from listed players, Blue Jet Health Care is a key supplier to market leaders and has significant growth potential in this niche, high-barrier market.
What do think the future holds for the company? Are you applying for the IPO? Let us know in the comments below.
Written By Niharika Jadhav
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