Blog

Blue Jet Healthcare IPO entails mobilizing Rs. 840.27 cr. purely though an offer for sale. Blue Jet Healthcare Ltd. is a specialty pharmaceutical and healthcare ingredients and intermediates company, offering niche products targeted toward innovator pharmaceutical companies and multi-national generic pharmaceutical companies. It has competencies and manufacturing capabilities in contrast media intermediates and high-intensity sweeteners which includes sweeteners like saccharin and its salts

About Blue Jet Healthcare Ltd.

• Company’s operations are primarily organized in 3 product categories:
  • • Contrast media intermediates,
  • • High-intensity sweeteners, and
  • • Pharma intermediates and active pharmaceutical ingredients (“APIs”).
• Contrast media are agents used in medical imaging to enhance the visibility of body tissues under X-rays, computed tomography (“CT”), magnetic resonance imaging (“MRI”) or ultrasound.
• High intensity sweeteners are compounds that are commonly used as substitute for sugar in food, beverages, oral health, and pharmaceutical products .
• Company’s CDMO activity in the pharma intermediate and API business primarily focuses on collaborating with innovator and multi-national generic pharmaceutical companies.
• Blue Jet Healthcare currently operates 3 manufacturing facilities, which are located in Shahad (Unit I), Ambernath (Unit II) and Mahad (Unit III) in the state of Maharashtra, with an annual installed capacity of 200.60 KL, 607.30 KL and 213 KL, respectively, as of June 30, 2023.
• For high-intensity sweeteners, it caters to overr 300 customers in India, United States, Europe, Asia and Latin America with a focus on marquee customers, such as Colgate-Palmolive (India) Ltd, Unilever, Prinova US LLC, and MMAG Co. Ltd.
• It caters to many other international and domestic manufacturers for oral care products, soft drinks, cosmetics and pharmaceutical products
• As of June 30, 2023, it operated three manufacturing facilities, which are located in Shahad (Unit I), Ambernath (Unit II) and Mahad (Unit III), in the state of Maharashtra, India, with an aggregate annual production capacity of 1,020.90 KL.
• In accordance with its growth strategy to increase pharma intermediate and API manufacturing capabilities, it acquired a greenfield manufacturing site (Unit IV) in Ambernath, Maharashtra in the Financial Year 2021 to build several multi-purpose blocks.
• Promoters are Akshay Bansarilal Arora, Shiven Akshay Arora and Archana Akshay Arora.

Financials: Blue Jet Healthcare Ltd.

Anchor: Blue Jet Healthcare IPO

Blue Jet Healthcare IPO: Salient Points

• Blue Jet Healthcare issue constitutes 14.00% of the post-IPO paid-up capital of the company.
• Promoters stake shall stand at 86% post IPO.
• Global contrast media formulation market was approximately US$5.9 billion for June 2023, and is forecasted to grow at a CAGR of 6% to 8% between calendar years 2023 and 2025, primarily led by increased volumes.
• Saccharin is primarily used in table-top sweeteners, oral care products such as toothpastes and mouthwashes, beverages (primarily soft-drinks), confectionary products (such as mints, candies, and bakery products), pharmaceutical products, food supplements and animal feeds
• The global high-intensity sweetener market was approximately US$2.9 billion to US$3.0 billion, as of the calendar year 2023. The end product markets for high-intensity sweeteners, including oral care and non-alcoholic beverages, among others, are expected to grow at CAGRs of between 3% and 8% during calendar years 2023 to 2026
• A significant portion of its revenue from operations comes from our contrast media intermediates. Product breakup:

• It supplies a critical starting intermediate and several advanced intermediates to three of the largest contrast media manufacturers in the world, including GE Healthcare AS, Guerbet Group, and Bracco Imaging S.p.A.
• The Global contrast media market is dominated by 4 players and company supplies to 3 of these players.
• Supplies high-intensity sweeteners to several multi-national companies, including Colgate Palmolive (India) Limited and Unilever.
• Blue Jet enjoys ~10% volume share of global saccharin market,
• Its has long-term contracts with terms ranging from one to five years and relationships ranging from two to fourteen years with many clients.
• 75% of the sales comes from Europe, 5% from USA, 14% from India and remaining 6% from others. Most business is with regulated markets.
• Blue Jet enjoys ~10% share of the global saccharin market,
• Once the capacity expansion at Unit III is completed and Unit IV is operational, Company estimates total annual production capacity across all four units to be 1,513.6 KL from 1,020.90 KL at present. This is about 48% additional capacity.
• Fright increase and increase in chemicals price increase affected the profits in Fy23. Has been able to renegotiate to some extent in Q1Fy24.
• Historically asset turn has been 5.6x which is indicative that company uses its assets very efficiently to generate income.
• Company is debt free.
• There are high barriers to entry,
• Dependency on raw material import is expected to come down from next year on account of backward integration.
• Blue Jet Healthcare IPO is coming at a PE ratio of 37.5x(fy23 earnings), 34 (FY24 annualized on Q1FY24 results).
• I intend to apply in the Blue Jet Healthcare IPO . It looks good from a longer perspective as well as listing gains.
• GMP as reported on social media has been around Rs. 85.

Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . Also Certified in some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.