IPO Launch Date, Evaluation, Pricing, and Allocation Particulars of JG Chemicals

The IPO details for JG Chemicals have been confirmed, with the IPO scheduled to launch on March 5 and conclude on March 7. JG Chemicals aims to raise approximately ₹251.19 crores through the IPO, comprising a fresh issue of ₹165 crores and an offer for sale of up to 11,366,063 equity shares priced at ₹10 each. The allocation breakdown is as follows: 35% for retail investors, 50% for qualified institutional buyers (QIB), and 15% for high net worth individuals (HNI).

JG Chemicals is India’s largest zinc oxide manufacturer in terms of production and revenue for zinc oxide manufacturing through the French process, which is the dominant production technology for producing zinc oxide and has been adopted by all the major producers in the Americas, Europe, and Asia (Source: CARE Report). The market share of their Company is around 30% as of March 2022 (Source: CARE Report). They sell over 80 grades of zinc oxide and are among the top ten manufacturers of zinc oxides globally (Source: CARE Report).

Since their incorporation in 2001, they have expanded their business and scale of operations and have grown into a large, diversified zinc oxide player with a global footprint. Their product caters to a wide spectrum of industrial applications, including rubber (tire & other rubber products), ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, specialty chemicals, lubricants, oil & gas, and animal feed.

Owing to their legacy of over four decades in manufacturing businesses, they benefit from their experience in catering to a wide array of customers. They have built a long-standing relationship with customers across end-user industries in the tires, ceramics, rubber, paints, cosmetics, and batteries industry. Over the last three years, they marketed and sold their product to over 200 domestic customers and over 50 global customers in more than 10 countries.

JG Chemicals IPO Details

IPO Date March 5, 2024 to March 7, 2024
Listing Date March 13, 2024
Face Value ₹10 per share
Price Band ₹210 to ₹221 per share
Lot Size 67 Shares
Total Issue Size 11,366,063 shares (aggregating up to ₹251.19 Cr)
Fresh Issue 7,466,063 shares (aggregating up to ₹165.00 Cr)
Offer for Sale 3,900,000 shares of ₹10 (aggregating up to ₹86.19 Cr)
Issue Type Book Built Issue IPO
Listing At BSE, NSE
Share holding pre issue 31,720,000
Share holding post issue 39,186,063

JG Chemicals IPO Timeline (Tentative Schedule)

IPO Open Date Tuesday, March 5, 2024
IPO Close Date Thursday, March 7, 2024
Basis of Allotment Monday, March 11, 2024
Initiation of Refunds Tuesday, March 12, 2024
Credit of Shares to Demat Tuesday, March 12, 2024
Listing Date Wednesday, March 13, 2024
Cut-off time for UPI mandate confirmation 5 PM on March 7, 2024

Key Performance Indicator

ROE 8.20%
ROCE 11.86%
Debt/Equity 0.11
RoNW 8.16%
P/BV 3.51
PAT Margin (%) 7.24%

Objects of the Issue (JG Chemicals IPO Objectives)

The company intends to utilize the Net Proceeds towards the following objects:
  1. Investment in Material Subsidiary, viz. BDJ Oxides (i) repayment or pre-payment, in full or in part, of all or certain borrowings availed by its Material Subsidiary; (ii) funding capital expenditure requirements for setting up of a research and development center 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; and
  3. General corporate purposes.

JG Chemicals IPO Review (Apply)

The company stands as India’s largest zinc oxide manufacturer, catering to nearly all major tyre manufacturing companies worldwide. While it achieved growth in both its top and bottom lines from FY21 to FY23, it experienced a decline in revenue and profits during 9M-FY24 due to a significant drop in global zinc oxide prices. However, with the observed reversal in trends, the company is poised to regain its momentum. Although the valuation of the offering seems fully priced based on FY24 annualized earnings, it warrants consideration for potential medium to long-term rewards.

JG Chemicals Limited Financial Information (Restated Standalone)

JG Chemicals Limited’s revenue increased by 27.47% and profit after tax (PAT) rose by 31.69% between the financial year ending with March 31, 2023 and March 31, 2022.

Period Ended 31 Dec 2023 31 Mar 2023 31 Mar 2022 31 Mar 2021
Assets 271.26 297.79 264.14 209.94
Revenue 491.10 794.19 623.05 440.41
Profit After Tax 18.51 56.79 43.13 28.80
Net Worth 217.86 199.89 147.66 108.48
Reserves and Surplus 193.22 175.67 151.23 107.17
Amount in ₹ Crore

JG Chemicals Company Financial Report

₹ in Crores
Year Revenue Expense PAT
2021 ₹407.27 ₹388.16 ₹13.95
2022 ₹440.40 ₹399.20 ₹28.80
2023 ₹623.05 ₹565.60 ₹43.13
Sep 2023 ₹432.20 ₹383.67 ₹35.71

Company Promoters

  • Suresh Jhunjhunwala
  • Anirudh Jhunjhunwala
  • Anuj Jhunjhunwala