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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