Blue Jet Healthcare Limited filed DRHP for an offer-for-sale: Indepth Insights

Blue Jet Healthcare Limited

Blue Jet Healthcare Limited Company Overview –

Blue Jet Healthcare Limited filed a DRHP document on September 2, 2022, for an offer for sale (OFS) of 21,683,178 Equity Shares with a face value of INR 2 per equity share. The total aggregating value of the offer for sale (OFS) is approximately INR 1800 Crores.

The company was incorporated as ‘‘Jet Chemicals Private Limited,” in Mumbai, India on December 7, 1968. To become a public company before IPO, the name again changed to “Blue Jet Healthcare Limited” on May 5, 2022, and a certificate of change of name was issued by the RoC. The registered and corporate office of Blue Jet Healthcare Ltd’ is in Bhumiraj Costarica, Sector 18, Sanpada, Navi Mumbai, Thane – 400 705, Maharashtra, India.

    • Blue Jet Healthcare Limited is a technology-driven science-led pharmaceutical company that manufactures advanced Pharmaceutical Intermediates and API.
    • Blue Jet Healthcare targets innovator pharmaceutical companies and multinational generic pharmaceutical companies for its products.
    • The company has been constantly innovating its product. It offers all its products under the brand name “Blue Jet”.
    • Established a contract development and manufacturing organization (“CDMO”) business model with specialized chemistry capabilities with the back of a strong R&D facility.
    • Customer base spread over 35 countries across the world to more than 350 customers.
    • Blue Jet Healthcare operates three manufacturing facilities located in Shahad (Unit I), Ambernath (Unit II), and Mahad (Unit III) in the state of Maharashtra, India.
    • As of March 31, 2022, the annual installed capacity is 200.60 KL, 607.30 KL, and 213.00 KL, respectively in the above facilities.

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Blue Jet Healthcare Limited Products focus on niche products in the pharma industry

The company manufactures a range of products in-house, including the key starting intermediate and advanced intermediates. The company’s products can be categorized as follows.

    • Contrast media intermediates – 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. The company is the largest exporter of a selected contrast media intermediate in India for the past three calendar years
    • High-intensity sweeteners – involve the development, manufacture, and marketing of saccharin and its salts. The company is backward integrated for these products. Saccharin is primarily used in tabletop sweeteners, oral care products, beverages, confectionary products, pharmaceutical products, food supplements, and animal feeds.
    • Pharma intermediates and active pharmaceutical ingredients (“APIs”).

Blue Jet Healthcare Limited Founders and Leadership team

The company is run by experienced Promoters and a qualified senior management team with significant experience in the business.

Mr. Akshay Bansarilal Arora is the promoter and Executive Chairman of the Company. He has over three decades of experience in business operations, project management, and business development. Mr. Arora holds 79.58% of pre-Offer issued, subscribed, and paid-up Equity Share Capital. He has been on the Board since April 13, 1983.

Mr. Akshay Bansarilal Arora holds a bachelor’s degree in science (Chemistry) from the University of Bombay and a master’s degree in science (Organic Chemistry) from St. Xavier’s College, University of Mumbai. He has more than three decades of experience while being associated with the Company.

Mr. Shiven Akshay Arora is one of the promoters and Managing Director of the company. He has more than six years of experience in business management. Mr. Shiven holds 14.37% of pre-Offer issued, subscribed, and paid-up Equity Share Capital in the company. He has been on the Board since December 8, 2015. Mr. Shiven holds a bachelor’s degree in business from Bond University, Gold Coast, Australia with over six years of experience while being associated with our Company.

Mr. Vimalendu Kumar Singh is the Chief Operating Officer of the company. He is experienced in formulations, drug delivery, APIs, business development, corporate strategy, and mergers and acquisitions. He is responsible for the operations of the company.

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Blue Jet Healthcare Limited Revenue and profits

The total income of the company has gone up from INR 544 Crores in FY 2020 to INR 683.5 Crores in FY 2022. The company incurred a PAT of INR 145 Crores in FY 2020 to INR 181.6 Crores in FY 2022.  It is a zero-debt company with working Capital Borrowings/Loans from directors/ Current maturity of long-term debt is zero in FY 2022. Refer to the table below for all the figures.

Europe is the major contributor to the company’s total revenue of about 76% in FY 2022. Total revenue from sales of products in FY 2022 is INR 6767.80 million. Revenue from the ten largest customers as a percentage of total revenue from operations is about 82% while it from the top five largest customers is about 75% in FY 2022. Revenue from the largest customer as a percentage of total revenue from operations is about 62 percent.

Blue Jet Healthcare Limited – Valuation Parameters

Blue Jet Healthcare Pvt Ltd has registered a strong debt-equity ratio. The Net cash flow from operating activities has been strong over the years mentioned. Other parameters such as the return on equity, ROCE, and profit margin, EPS are showing the strength of the company. Refer to the table below for detailed figures.  

Financial Parameters:

All amounts in INR Million except percentages
(Year ended March 31)
Revenue from Operations5,381.95 4,989.326,834.69
Total Income5,440.065,078.137,028.81
Profit After Tax for the Year1,449.581,357.871,815.91
Profit Margin26.93%27.22%26.57%
EBITDA2,137.24 2,060.532,492.64
EBITDA Margin39.71% 41.30%36.47%
Return on Equity112.43% 50.18%42.16%
Return on Capital Employed71.84% 49.70%47.13%
Net Debt / Equity0.3500
Earnings Per Share-Diluted (in INR)8.35 7.9810.47
Net Cash from Operating Activities1,227.29 1,292.751,464.17
Free cash flow774.93 785.50703.91

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Blue Jet Healthcare Pvt Ltd IPO: Do you invest? 10 factors to know

    • The contrast media market is a fast-growing category, driven by a growing global population, especially in the age group aged 65 years and above.
    • Blue Jet Healthcare is one of the largest manufacturers of contrast media intermediates in India with two decades of experience in this segment.
    • The company is present in niche categories with high barriers to entry in both the contrast media intermediate and high-intensity sweetener categories.
    • Strong and long-term and multi-year contracts with multi-national customers ranging from four to 24 years in different segments. This is the most important requirement for the pharmaceutical business.
    • Blue Jet Healthcare is planning to enter adjacencies in the pharma intermediate and API category, leveraging its client relationship.
    • The government of India is pushing the make-in-India concept in the API industry to support domestic companies.
    • Professional and experienced management team with over two decades of the establishment of the company.
    • However, the company is depending on a single customer for over 60% of its revenue.
    • Over 70% of the revenue is coming from Europe only in FY 2022.
    • Any slowdown in the European economy or change in customer demand will hurt the company’s revenue.