JG Chemicals IPO: From financials to key risks, here are 10 things to know from RHP before subscribing

Here are 10 things to know from the RHP before subscribing

JG Chemicals IPO Subscription details

Issue opened for subscription on Tuesday, March 5, and will close on Thursday, March 7.  JG Chemicals IPO price band has been set in the range of   ₹210 to   ₹221 per equity share of the face value of ₹10. Investors can bid for a minimum of 67 equity shares and in multiples of 67 equity shares thereafter.

It has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

JG Chemicals IPO allotment and listing dates

JG Chemicals IPO is a book built issue of ₹251.19 crores. The issue is a combination of fresh issue of 0.75 crore shares aggregating to ₹165.00 crores and offer for sale of 0.39 crore shares aggregating to ₹86.19 crores.

The allotment for the JG Chemicals IPO is likely to be finalized on Monday, March 11, 2024. JG Chemicals IPO will list on BSE, NSE and tentative listing date fixed is Wednesday, March 13, 2024.

Also Read: JG Chemicals IPO: Issue oversubscribed on day 2 led by retail investors, NIIs; check GMP

JG Chemicals IPO: Objectives of the issue

The selling shareholders in the Offer for sale component are Vision Projects & Finvest Private Ltd (offloading up to 2,028,900), Jayanti Commercial Limited (selling up to 1,100 equity shares), Suresh Kumar Jhunjhunwala (HUF) (selling up to 1,260,000 equity shares), and Anirudh Jhunjhunwala (HUF) (offloading up to 610,000 equity shares).

The net proceeds form fresh issue of 0.75 crore shares aggregating to ₹165.00 crores will be used for the following purposes by the company:

a) for investing in the Material Subsidiary, BDJ Oxides with an objective to repay or prepay all or some of the borrowings that the Material Subsidiary has taken out. The funds will also be used for financing the capital expenditures needed to establish a research and development Centre in Naidupeta. In addition some part will be used for financing the extended working capital needs of the company.

b)Funding long-term working capital requirements of  the Company

c) General corporate purposes

JG Chemicals IPO: About the Company

In terms of both output and income, JG Chemicals is India’s largest manufacturer of zinc oxide, according to the Red Herring Prospectus (RHP).The allotment for the JG Chemicals IPO is expected to be finalized on Monday, March 11, 2024. JG Chemicals IPO will list on BSE, NSE with tentative listing date fixed as Wednesday, March 13, 2024.

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The firm is one of the top 10 producers of zinc oxides worldwide and distributes more than 80 grades of the metal.

Numerous industrial sectors, including the rubber sector (tyres and related products), ceramics, paints and coatings, pharmaceuticals and cosmetics, electronics and batteries, agrochemicals and fertilisers, specialty chemicals, lubricants, oil and gas and animal feed, use the company’s products.

JG Chemicals IPO Financials

Between March 31, 2022, and March 31, 2023, JG Chemicals Limited’s profit after tax (PAT) climbed by 31.69%, while its sales increased by 27.47%.For nine months period ended

For the dirst nine months ending December 31, 2023 and Fiscals 2023, 2022 and 2021, its restated profit after tax for the year was ₹ 185.10 million, ₹ 567.93 million, ₹ 431.26 million and ₹ 287.99 million, respectively. Its restated profit after tax, grew at a CAGR of 40.43% between the Fiscals 2021 and 2023

JG Chemicals IPO: Peer Group

As per the RHP, J. G. Chemicals listed peers are Rajratan Global Wire Ltd , NOCIL Ltd , and Yasho Industries Ltd .

J. G. Chemicals Ltd earnings per share for FY23 stood at ₹6.30, which means. Hence J G Chemicals issue is at 2.23 times P/B (price to book) and 35.09 times price to equity (P/E) as per analysts calculation.

Rajratan Global Wire P/E stood at 33.43 times, P/B of 7.15 times as on Feb 22, 2024

NOCIL, P/E is at 30.97 times, P/B of 2.62 times.

Yasho Industries Ltd P/E stands at 30.03times .

JG Chemicals promoters details

The Promoters of the company are Suresh Jhunjhunwala, Anirudh Jhunjhunwala and Anuj Jhunjhunwala.

JG Chemicals IPO registrar

JG Chemicals IPO Centrum Capital Limited, Emkay Global Financial Services Ltd and Keynote Financial Services Ltd are the book running lead managers of the JG Chemicals IPO, while Kfin Technologies Limited is the registrar for the issue.

Also Read- Gopal Snacks IPO: Issue subscribed 43% on day 1 so far, retail potion booked 73%; check GMP

JG Chemicals IPO: Key Risks

1), JG Chemicals business is almost completely dependent on the sale of one principal product i.e. zinc oxide (in various grades) and any reduction in the demand of the same may have an adverse effect on its business and financial performance.

2) JG Chemicals is significantly dependent on the business operations of our material subsidiary i.e. BDJ Oxides Private Limited and any deterioration in the performance of its material subsidiary may adversely affect its business, financial condition and results of operation

JG Chemicals IPO: GMP

JG Chemicals IPO grey market premium is +37. This indicates JG Chemicals share price were trading at a premium of ₹37 in the grey market, according to investorgain.com.

Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of JG Chemicals share price was indicated at ₹ 258 apiece, which is 16.74% higher than the IPO price of ₹221.

‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.

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Published: 06 Mar 2024, 04:56 PM IST