Should you apply for this IPO?

A new IPO has entered the block and that is Blue Jet Healthcare. It is in the business of healthcare as well as other segments. The company has three business verticals:

a) contrast media intermediates, b) high-intensity sweeteners, and c) pharma intermediates and APIs. The company works under contract development and manufacturing organisation (“CDMO”) business model. It has over 400 customers spanning across 39 countries. In contrast media intermediates (agents used in medical imaging), other major players are customrs of Blue Jet. Similarly, for high-intensity sweetners, oral care companies like Colgate Palmolive and Unilever are customers. Blue Jet enters in long-term contract with the company which provides them revenue visibility. Although the company is located in India, most of its business comes from abroad. From India, the company generates close to just 15% revenue. Europe contributes close to 80% share in revenue.

The company has three manufacturnig plants in Maharashtra. In next few years it is looking to increase the production capacity by around 50%, this indicates good demand prospects for the company. Although it is a growing company, in recent years it’s EBITDA margins have contracted.

Brokerages are mostly bullish. Stoxbox, Reliance Securities, Anand Rathi, Geojit have given subscribe rating on the IPO.

IPO Details

IPO will remain open from 25th October to 27th October
Price Band is from ₹329 – ₹346 per share
The company is looking to raise ₹840.27 crore from IPO
Existing investors will get ₹840.27 crore from OFS

On First day it got subscribed 69%