Blue Jet Healthcare to debut on November 1: Stock may list at 5-8% premium over IPO price

Blue Jet Healthcare's Rs 840.27 crore public offer was entirely an offer-for-sale.

Blue Jet Healthcare stock may list at a premium of 5-8 percent on bourses, according to analysts. The issue received a decent response from investors and now analysts expect the stock to open somewhere between Rs 360 and Rs 370 against the issue price of Rs 346.

In the grey market, the stock was commanding a premium of 6 percent, analysts told Moneycontrol on condition of anonymity. The grey market is an unofficial trading platform where shares get traded well before the allotment in the IPO and until the listing day. Most investors track the grey market to get an idea of the listing price.

“We expect Blue Jet to list at a 5-8 percent premium over the issue price on the listing. We recommend booking partial & holding partial allotment for the long term as the company being a large manufacturer of contrast media intermediates in India has a presence in niche categories with high barriers to entry,” said Astha Jain, Senior Research Analyst at Hem Securities.

Also Read: Blue Jet Healthcare IPO: 10 things to know

The Rs 840.27 crore public offer was entirely an offer-for-sale. The price band for the issue, which opened on October 25 and closed on October 27, was fixed at Rs 329-346 per share.

Shivani Nyati, Head of Wealth, Swastika Investmart, expects the stock to list at a premium of around 5-6 percent.

Blue Jet Healthcare IPO was subscribed 7.95 times, receiving bids for 13.5 crore shares against the issue size of 1.7 crore shares. Retail investors bought 2.22 times, high-net-worth individuals bought 13.59 times and qualified institutional buyers picked 13.72 times the allotted quota.

Despite having a niche product portfolio, according to Prashanth Tapse, Research Analyst, Sr VP Research at Mehta Equities Ltd, subscription demand was lower than the street expectations mainly due to muted market conditions and investors were also concerned as the issue was purely a secondary offer (OFS) with no funds coming in as growth capital to the company.

Tapse expects a flat listing around a 2-5 percent premium and advised conservative allotted investors to book profits on listing day.

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Meanwhile, Prathamesh Masdekar, Research Analyst at StoxBox expects the stock to open at a premium of around 7 percent due to sustained revenue and PAT growth which rose at a CAGR of 20.2 percent and 8.6 percent, respectively, during the FY21-23 period.

Masdekar remains optimistic on the issue and recommends investors to hold their shares on the opening day and consider buying on dips from a medium to long-term perspective.

Blue Jet Healthcare follows a contract development and manufacturing organisation (CDMO) business model, operating in three product categories— contrast media intermediates, high-intensity sweeteners and pharma intermediates & active pharmaceutical ingredients (APIs).

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