Blue Jet Healthcare makes decent debut; lists 10% higher over issue price

The stock listed at Rs 380, a 10 per cent premium over its issue price of Rs 346 per share on the NSE

Blue Jet Healthcare (BJHL) made a decent stock market debut on Wednesday with the stock listing at Rs 380, a 10 per cent premium over its issue price of Rs 346 on the National Stock Exchange (NSE).

Post listing, the stock moved higher to Rs 398.60, up 15 per cent over its issue price on the NSE.

At 10:04 AM; it was quoting at Rs 396 on the NSE and BSE. A combined 8.2 million equity shares changed hands on the counter, the exchange data shows.

BJHL manufactures contrast media intermediates and high-intensity sweeteners, where it has the benefit of high entry barriers and a long-term relationship with multinational customers.

It has established a contract development and manufacturing organization (CDMO) business model and it has competencies and manufacturing capabilities in contrast media intermediates and high-intensity sweeteners, including saccharin and its salts.

It caters to over 300 customers globally, which includes marquee clients like Colgate Palmolive (India), Unilever, Prinova US, MMAG Co.

The issue was subscribed 7.95 times. The company expects that the proposed listing of its shares will enhance its visibility and brand image as well as provide a public market for the shares in India.

BJHL has a strong track record with healthy topline growth of 10 per cent CAGR between FY20-23 and 24 per cent growth in Q1FY24 on year-on-year (YoY) basis.

In terms of operating performance, it has delivered strong margins of more than 35 per cent except in FY23 where it reported 30.4 per cent of EBITDA margin due to increase in raw material prices and employee expenses.

However, it has observed improvement in Q1FY24 on account of softening in raw material prices and other expenses.

"The issue is valued PE valuation of 33.9x based on Q1FY24 annualized EPS, which appears reasonable when compared with an average valuation of selected peers of 34.3x," analysts at Nirmal Bang Securities said in IPO note.

Analysts at Motilal Oswal Financial Services said in a note they like BJHL given its complex product portfolio, presence in niche space, strong client relationship and high entry barriers. The brokerage believes the company could benefit from the planned capacity expansion and sector tailwinds.