INDIAN INSTITUTE OF MANAGEMENT, INDORE

IPO: Blue Jet Healthcare Ltd

THE INVESTMENT AND EQUITY RESEARCH CLUB

Issue opens from 25-Oct-2023 to 27-Oct-2023 Sector: Pharmaceuticals

Business Overview Issue Snapshot
Blue Jet Healthcare develops and supplies speciality pharmaceutical
and healthcare ingredients and intermediates under a contract Issue Open 25-Oct-2023
development and manufacturing organization business model. They Issue Close: 27-Oct-2023
have specialized chemistry capabilities in contrast media intermediates
and high-intensity sweeteners and have built a long-term customer Issue Price: Rs. 329 – Rs. 346 per share
base of innovator and multi-national generic pharmaceutical Lot Size: Multiples of 43 shares
companies, supported by multi-year contracts. BJHL supplies a critical
starting intermediate and several advanced intermediates to three of Offer Size: ~ Rs. 840 Crore
the largest contrast media manufacturers in the world.
Offer Breakup
Key Financials
Issue Size (Cr)
(in Cr.) FY’21 FY’22 FY’23 Categories Allocation
Lower Band
Income 498.93 683.46 720.98
QIB: 50% 420
PAT 135.78 181.59 160.02
V O YA G E C A P I TA L – I P O N O T E

NII: 15% 126

EBITDA(%) 41.30% 36.47% 30.39%
EPS(in Rs.) 7.98 10.47 9.23 Retail: 35% 294

RONW (%) 39.96% 34.82% 23.48% Employees - -

Investment Rationale Tentative timetable

▪ Over the past three financial years, the company has conducted Allotment: 01-Nov-2023
business with more than 350 customers in 35 countries. They
Initiation of Refund: 02-Nov-2023
have established a loyal customer base, particularly with
innovator pharmaceutical companies and multinational generic Listing: 06-Nov-2023
pharmaceutical companies, often through long-term contracts.
IPO Lead Managers
▪ The company has developed specialized chemistry capabilities in
two primary areas: contrast media intermediates and high- Lead Kotak Mahindra Capital, JP
intensity sweeteners with no concrete competitors. Managers: Morgan India, ICICI Securities

▪ BJHL has developed strong R&D process engineering skills, which Registrar: Link Intime India Private Limited
allows it to convert lab-developed technologies into multi-
kilogram scale up. Objective of the issue

Key Risks ▪ The company will not receive any funds from
the IPO as the issue is entirely an OFS by
▪ Almost 84% of firm revenue comes from top 10 clients. The firm, existing shareholders.
results of operations, financial position, and cash flows could ▪ The proceeds from the issue will also be used
suffer if one or more of these clients left, their financial status for meeting general corporate purposes.
worsened, or demand for the company's products dropped.
Broker Outlook
▪ The company generates nearly 80% of its revenue from Europe
and the US which are highly regulated markets. The outlook of brokerages is generally positive,
with most recommending a "Subscribe" rating.
Brokerages believe that BJHL has a
commendable position in contrast media
Major listed peers
manufacturing. The product portfolio is niche
Company P/E ROE ROCE with high barriers to entry.
Syngene International 56.57 13.40% 14.53%
Summary of Broker Ratings
Alkem Laboratories 36.60 12.10% 13.70%
Reliance Securities Subscribe
Source: Draft Red Herring Prospectus, (*)Equity research Indsec Securities Subscribe
Disclaimer: Voyage capital provides the IPO Note with an intention to provide market knowledge. The
IPO Note should not any in manner be considered as a sign of the club's endorsement for the IPO. The Angel One Subscribe
club takes no responsibility for the outcome of the IPO

26 October 2023 VOYAGE CAPITAL - THE INVESTMENT AND EQUITY RESEARCH CLUB, IIM INDORE IPO – Note