J.G. Chemicals Ltd. IPO

J.G. Chemicals Ltd is the country’s biggest manufacturer of zinc oxide in terms of production capacity and revenue. As per reports in March 2022, this company owns 30% of the domestic market and belongs on the list of top 10 global zinc oxide manufacturing companies.

On 4^th January 2023, J.G. Chemicals Ltd received a green signal from SEBI to float its IPO. The company is yet to release tentative dates regarding its public issue after consulting its book-running lead managers.

So, if you want to invest in the J.G. Chemicals Ltd IPO, keep reading! 

Also Read: How does an IPO work?

About J.G. Chemicals Ltd

J.G. Chemicals Limited has been in the manufacturing business for more than 40 years. It sells 80+ grades of zinc oxide, used in a wide array of industrial applications like ceramics, tyres and other rubber products, paints, cosmetics, pharmaceuticals, fertilisers, electronics and more. 

Tyre producers are the largest customers of this company’s products. J.G. Chemicals supplies to all the top 11 Indian tyre manufacturers. Additionally, 9 out of 10 top global tyre companies source zinc oxide from this organisation. 

In the last three years, this company has sold its products to 200+ domestic clients and 50+ foreign clients across 10+ nations. 

J.G. Chemicals Ltd also has several group companies. They are:

1. Jayanti Commercial Limited 
2. Alkan Fiscal Services Private Limited 
3. Eeshwar Fiscal Services Private Limited 
4. Crystal Towers Private Limited 
5. BDJ Impex Private Limited 
6. BDJ Chemicals Private Limited 
7. Vision Projects & Finvest Private Limited 
8. Swarnim Complex Private Limited 
9. GoodNews Media Private Limited 
10. Afford Tie Up Private Limited 
11. Shreeji Merchants Private Limited  

J.G. Chemicals Ltd IPO Details

The J.G. Chemicals Limited IPO will have a fresh issue size aggregating up to Rs. 202.5 crore and an Offer for Sale (OFS) of up to Rs. 57 lakh equity shares. Each share will have a face value of Rs. 10 and will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). 

Anirudh Jhunjhunwala (HUF), Suresh Kumar Jhunjhunwala (HUF), Vision Projects & Finvest Private Ltd and Jayanti Commercial Ltd are the selling shareholders for this public issue. 

Centrum Capital Limited, Emkay Global Financial Services Limited and Keynote Financial Services Limited are the book-running lead managers. It is after consulting with them, J.G. Chemicals Ltd will announce the bid opening and closing dates, listing dates, minimum lot size, price band, etc. for its IPO. 

KFin Technologies Ltd is the registrar for this public issue; investors can visit its website in order to know their IPO allotment status. 

J.G. Chemicals Ltd IPO Objectives

J.G. Chemicals Pvt Ltd plans to use the funds from its public issue to invest in BDJ Oxides, which is its material subsidiary. It plans to pre-pay or repay in part or full all of the latter’s borrowings, set up an R&D facility for it at Naidupeta and cater to its long-term need for working capital. 

This will help the company bring about complex innovations in its products and make them available for its clients operating across various industrial sectors. J.G.Chemicals also plans on fulfilling its own working capital needs for the long term, along with funding its general corporate activities. 

Also Read: IPO investment strategy

Strengths

Here are the strengths of J.G. Chemicals Ltd:

• This company is India’s largest manufacturer of zinc oxide with a strong international customer base, spanning various industrial sectors. 
• It operates in an industry with high entry barriers like strict vendor-approval procedures, raw material tie-ups, technical expertise, high working capital needs, etc. This ensures the presence of only a few players in the market, reducing competition. 
• J.G. Chemicals has a track record of maintaining consistent financial growth over the years. For example, its revenue from operations increased from Rs. 3,993.91 crore to Rs. 6,128.30 crore between FY 2020 to 2022.
• The company has adopted several green initiatives over the years in order to focus on sustainability.
• It also has an experienced management team which can help maintain a strong relationship with clients and drive long-term growth. 

Risks

The risks of investing in J.G. Chemicals are listed below:

• Dependence on a few major clients for the lion’s share of its revenue
• Reliance on purchase orders as the company does not have long-term contracts with its clients
• Risk of loss due to low manufacturing levels

Also Read: Risk of investing in IPO

Conclusion

Investors are yet to receive updates on when the J.G. Chemicals Limited IPO is going to go live. You can keep a tab on the updates here. We have also presented the essential details of this company for you to make a fair assessment.

Remember, assessing both the strengths and weaknesses of a company is crucial before investing. This helps you understand whether it aligns with your risk appetite, enabling you to make an informed decision. 

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