Blue Jet Healthcare closes debut session with 14.4% listing gains

• The company’s market cap is at ₹6,243 crore as per Bombay Stock Exchange.
• Blue Jet Healthcare’s IPO was subscribed 7.9 times with good institutional interest.
• The grey market was expecting 7% listing gains from the stock.

The stock of pharma intermediates manufacturer Blue Jet Healthcare debuted at 4% premium on the bourses on Wednesday. While it registered a positive debut, the listing gains are below grey market expectations of 7% premium.

The stock listed at ₹359 as compared to the issue price of ₹346. It however picked up during the trading session, giving its IPO investors a 14.4% listing gains.

The company’s market capitalization is at ₹6,243 crore as per Bombay Stock Exchange.

The ₹840 crore IPO of pharma intermediates manufacturer Blue Jet Healthcare was subscribed 7.9 times. It received good interest from qualified institutional buyers (QIBs) and non-institutional investors.

The last few companies which listed on the stock exchange have become a victim of stock market volatility. IRM Energy and Updater Services’ stock slipped around 5% below their listing price on debut day. But most other recent debuts have given positive debuts to their investors.

Here are the listing gains of the last few public debuts.

Niche presence impresses analysts

The company has fixed the price band at ₹329-346 per equity share for the offer. The IPO is a complete offer-for-sale wherein the company will not receive any proceeds from the sale.

The company was incorporated in 1968 as Jet Chemicals, and is promoted by its executive chairman, Akshay Bansarilal Arora. It operates under the Blue Jet brand name and manufactures contrast media intermediates, high-intensity sweeteners, including saccharin, salts and active pharmaceutical ingredients (APIs).

It claims to have developed over 100 products with over 40 products commercialised. As of June 30, 2023, it operates three manufacturing facilities, in Shahad, Ambernath, and Mahad in Maharashtra.

Analysts believe that Blue Jet Healthcare’s presence in niche categories have high entry barriers. They are also impressed with its product development and process optimisation capabilities.

It also has established relationships and multi-year contracts with multinational clients, not only for long-term supply agreements but also to handle warehousing and logistics.

“At the upper price band, the company is valued at P/E of 34x, with a market cap of ₹6,001 crore post issue of equity shares. We believe that valuations of the company is fairly priced and recommend a ‘subscribe- long term’ rating to the IPO,” said Anand Rathi.

Rajan Shinde, research analyst at Mehta Equities is of the opinion that the issue is fully priced. “However, Blue Jet's unique niche product segment and lack of immediate peers might attract demand based on a first-mover advantage, potentially leading to significant listing gains. While the 100% offer for sale (OFS) is a concern for new investors, Mehta Equities recommends subscribing to the Blue Jet IPO with a risk perspective, expecting decent listing gains,” he added.