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JG Chemicals Ltd IPO: Review, Valuation, Opening Date & GMP

  


JG Chemicals Limited IPO  - Complete Overview

Established in 1975, JG Chemicals Limited holds the title of India’s largest zinc oxide manufacturer based on both production volume and revenue generated through the French process. 

Offering a diverse range of over 80 grades of zinc oxide, the company ranks among the top ten zinc oxide manufacturers globally. 

Its products find applications across a wide spectrum of industries, including rubber (tyres and other rubber products), ceramics, paints and coatings, pharmaceuticals and cosmetics, electronics and batteries, agrochemicals and fertilizers, specialty chemicals, lubricants, oil and gas, and animal feed.

Over the past three years, the company has successfully marketed and sold its products to over 200 domestic customers and more than 50 global customers across more than 10 countries.

As of December 31, 2023, the company's aggregate installed capacity stands at 77,040 MTPA, spread across three manufacturing facilities situated in Jangalpur (Kolkata, West Bengal), Belur (Kolkata, West Bengal), and Naidupeta (Nellore District, Andhra Pradesh). Notably, the Naidupeta facility, owned and operated by its Material Subsidiary, is the largest manufacturing site.

All manufacturing facilities of JG Chemicals Limited have received accreditation under ISO 9001:2015, ISO 45001:2018, and ISO 14001:2015 standards. 

For the nine-month period ended December 31, 2023, and the fiscal years 2023, 2022, and 2021, the company reported revenue from operations of ₹4,863.22 million, ₹7,845.76 million, ₹6,128.30 million, and ₹4,352.98 million, respectively.

 

JG Chemicals Limited IPO Overview:

JG Chemicals Limited IPO date is slated to be open for subscription from March 5, 2024, to March 7, 2024. This IPO follows a Book Built Issue IPO.

JG Chemicals Limited IPO price is set between the range of ₹210 to ₹221 per share. 

The total issue size of this IPO amounts to Rs. 251.19 Cr. Out of the total issue the company has allocated 50% to institutional investors, 15% to non-institutional investors and 35% to retail investors.

Company Financial

Compared to the previous fiscal year, JG Chemicals Limited has seen growth in total assets, net worth and total revenue. The profit after tax has also increased.

(Amount in crores)

Period

31 Dec 2023

31 Mar 2023

31 Mar 2022

Total Assets 

271.26

297.79

264.14

Total Revenue

491.10

794.19

623.05

PAT

18.51

56.79

43.13

Net worth

217.86

199.89

147.66

Reserve & Surplus 

193.22

175.67

151.23

 

Percentage of the sales to the various end-use Industries the company cater to

(as a % of our revenue from operations)

Industry

December 31, 2023

Fiscal 2023

Fiscal 2022

Rubber and tyres

90.50

90.46

90.10

Pharmaceuticals & chemicals

7.09

6.79

6.37

Agriculture

0.75

0.92

2.06

Others*

1.66

1.83

1.47

Total

100.00

100.00

100.00


Industry wise break-up of the revenue from operations

(in ₹million)

Industry

Nine months period 
ended December 31, 2023

FY 23

FY 22

Rubber 

4,401.21

7,097.27

5,521.60

  • tyres

4,048.63

6,510.41

5,012.95

  • Other Rubber products

352.58

586.86

508.65

Pharmaceuticals & Cosmetics

344.80

532.73

390.37

Agriculture

36.47

72.18

126.24

 

 

 

The Objective of the Issue

The Company intends to utilize the Net Proceeds to fulfil the following objects:

1. Investment in its Material Subsidiary, viz. BDJ Oxides (i) repayment or pre-payment, in full or in part, of

all or certain borrowings availed by our Material Subsidiary; (ii) funding capital expenditure requirements

for setting up of a research and development centre situated in Naidupeta, Andhra Pradesh (“R&D Centre”); and (iii) funding its long-term working capital requirements.

2. Funding long-term working capital requirements of the Company

3. General corporate purposes.

Peers of JG Chemicals Limited IPO

Name of the company

Total Income (in Rs.Million)

EPS (Rs.)

P/E Ratio

J.G.Chemicals Limited

7,941.88

17.32

-

Rajratan Global Wire

Limited

8,986.80

19.72

33.43

NOCIL Limited

16,228.10

8.95

30.97

Yasho Industries Limited

6,825.95

59.54

30.03

  

IPO's Strengths 

  • Holding a leading market position with a diversified customer base.

  • High entry barriers in key end-use industries.

  • Demonstrating strong and consistent financial performance.

  • Nurturing long-term relationships with both customers and suppliers, supported by a robust supply chain.

  • Backed by an experienced and dedicated management team.

  • Prioritizing long-term sustainability through environmental initiatives and adherence to safety standards

 

 

IPO Weaknesses 

  • The company is significantly dependent on the business operations of our material subsidiary i.e. BDJ Oxides Private Limited.

  • Operating within a competitive industry, the company faces several challenges.

  • The company's operations heavily depend on the rubber and tyre industry, lacking diversification across other Application Industries.

  • Pending litigations against the Company, its Subsidiary, and certain Directors are a concern.

  • Non-compliance with safety, health, environmental, and labour laws, along with changes in applicable regulations, may adversely affect business.

  • Negative cash flows used in operating activities were observed in the financial year ending March 31, 2021.

  • Various licenses and approvals are required for the company to undertake its business.

IPO GMP Today 

The Latest GMP of JG Chemicals Limited IPO is Rs.28.

 

JG Chemicals Limited IPO timetable (Tentative)

JG Chemicals Limited IPO is scheduled from March 5 to March 7, 2024, with allotment on March 11, refund initiation on March 12, and listing on March 13, 2024.

Events 

Date

IPO Opening Date

March 5, 2024

IPO Closing Date

March 7, 2024

IPO Allotment Date 

March 11, 2024

Refund initiation 

March 12, 2024

IPO Listing Date

March 13, 2024


JG Chemicals Limited IPO Details 

JG Chemicals Limited IPO, with a face value of Rs.10 per share, opens on March 5 and closes on March 7, offering 11,366,063 shares between the range of Rs.210 to Rs. 221 per share, with a lot size of 67 shares, and will be listed on NSE and BSE.

IPO opening & closing date 

March 5, 2024 to March 7, 2024

Face value 

₹10 per share

Issue Price

₹210 to ₹221 per share

Lot Size

67 Shares

Price of 1 lot

₹14,807

Issue Size

11,366,063 shares (aggregating up to ₹251.19 Cr)

Offer for sale 

3,900,000 shares of ₹10 (aggregating up to ₹86.19 Cr)

Fresh issue 

7,466,063 shares (aggregating up to ₹165.00 Cr)

Listing at

BSE, NSE

Issue Type 

Book Built Issue IPO

Registrar 

Kfin Technologies Limited 

 

JG Chemicals Limited IPO Lot Details 

For JG Chemicals Limited IPO, the retail investor can bid for a minimum 1 lot and maximum 13 lot, while for HNI investors, the minimum investment is 14 lots (938 shares) at Rs.207,298.

Minimum Lot Investment (Retail) 

1 lot

Maximum Lot Investment (Retail) 

13 lot

Minimum Lot Investment (HNI) 

14 lot

Maximum Lot Investment (HNI) 

67 lot

 

JG Chemicals Limited IPO Reservation

Institutional share Portion

50%

Non-institutional share Portion

15%

Retail share Portion

35%

 

 

Promoters and Management of JG Chemicals Limited

  • Suresh Jhunjhunwala

  • Anirudh Jhunjhunwala 

  • Anuj Jhunjhunwala

Pre-issue Promoter shareholding

100.00%

Post-issue Promoter shareholding

 

 

JG Chemicals Limited IPO Lead Managers

  • Centrum Capital Limited

  • Emkay Global Financial Services Ltd 

  • Keynote Financial Services Ltd

Dividend Policy

The company didn’t pay dividends in past fiscal years. The future payment of the dividend depends on factors like profits, past dividend trends, capital needs, legal restrictions, and other relevant considerations evaluated by the Board.

 

 

Conclusion

JG Chemicals Limited, the leading zinc oxide manufacturer in india, offers an exciting investment opportunity with its upcoming IPO. The company's financial performance has been consistently improving over time. Nonetheless, investors should diligently assess both the merits and drawbacks of the IPO before making any decisions.

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

 

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Frequently Asked Questions

+

The IPO is scheduled to open for subscription on March 5, 2024.

 

+

The issue price for JG Chemicals Limited IPO is set in the range of ₹210 to ₹221 per share.

 

+

The total issue size of the IPO is Rs.251.19  Cr, with 35% reserved for retail investors.

 

+

The IPO is set to close on March 7, 2024.

 

+

The IPO's net proceeds will be allocated towards investment in Material Subsidiary, Funding long-term working capital requirements, and addressing general corporate requirements.

 



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