Blue Jet Healthcare IPO sails through on Day 2; NIIs, retail portions fully booked

The initial public offering (IPO) of Blue Jet Healthcare continued to attract strong response from the investors during the second day of the bidding process. The issue had opened for subscription on Wednesday, October 25 was overall subscribed 70 per cent on the first day. Bidding for the issue will close on Friday, October27.

Blue Jet Healthcare is selling its shares in the range of Rs 329-346 apiece with a lot size of 43 equity shares. The pharma company' s IPO is entirely an offer-for-sale (OFS) of up 24,285,160 shares by its promoters to raise up to Rs 840.27 crore from primary markets.

According to the data, the investors made bids for 1,63,61,285 equity shares, or 96 per cent , compared to the 1,69,99,612 equity shares offered for the subscription by 12.20 pm on Thursday, October 26. An issue with an overall subscription of more than 90 per cent is considered successful and called as 'sailed through' on layman terms.

The portion reserved for non-institutional investors (NIIs) was subscribed 1.97 times, while the allocation for retail investors saw a subscription of 1.08 times. The quota set aside for qualified institutional bidders (QIBs) was subscribed merely 0.01 per cent as of the same time.

Blue Jet Healthcare is a global pharmaceutical company, healthcare ingredient player and an intermediate company. It initially was a saccharin (artificial sweeteners) and its salts maker in India but later expanded into contrast media intermediates, which are used in CT scans and MRIs.

Majority of the brokerage firms, tracking the issue, are positive on it and have a 'subscribe; rating for the IPO. They are positive on its growth prospects, niche business models, sound financials and debt free status of the company. Interestingly, the company has no comparable peers listed on the street.

At the upper price band of Rs 346, Blue Jet Healthcare is available at a P/E of 34 times, which appears to be fully priced. Considering its strong business prospects, healthy return ratios, forward integration, greenfield expansion plans and promising industry outlook, we assign a 'subscribe' rating on a medium- to long-term basis, said Geojit Financial Services.

Motilal Oswal Financial Services likes Blue Jet given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. "We believe the company could benefit from the planned capacity expansion and sector tailwinds. Hence we recommend 'subscribe' to the IPO," it said.

ICICI Securities, JP Morgan India and Kotak Mahindra Capital Company are the book running lead managers for the IPO while Link Intime India is the registrar for the issue. Shares of the company will be listed on both BSE and NSE.  Blue Jet Healthcare raised Rs 252.08 crore from 22 anchor investors on Monday by allocation of 72,85,548 shares at a price of Rs 346 apiece.

Mehta Equities believes Blue Jet Healthcare IPO offer gives investors an opportunity to invest in a Speciality pharmaceutical company which offers niche products to innovator pharmaceutical companies. The issue may fetch demand on first mover advantage due to which there could be a decent listing gains expected, said Mehta Equities.

"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. Long term investors should look at the offer," it added.

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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