J.G. Chemicals Ltd. will raise Rs. 252 crore through an initial public offering (IPO). The offering consists of new shares as well as offers for sale (OFS) equity from existing owners. The dates, issue size, and price range have yet to be disclosed.
J.G Chemicals is one of the top ten global producers of zinc oxide. It has sold its products to over 200 local and 50 international customers in the last three years. J.G Chemicals supplies 9 of the top 10 worldwide tyre manufacturers and 11 of the top Indian tyre manufacturers with zinc oxide, a vital component in type manufacturing. Zinc oxide is also employed in the medicinal, chemical, and agricultural industries. J.G Chemicals Ltd. has three production plants with a combined installed capacity of 77,040 MTPA.
J.G. Chemicals is the largest Indian zinc oxide company in terms of production and income. In FY22, the company held a 30% market share by selling over 80 grades of zinc oxide. The company manufactures zinc oxide using an internationally recognized French technique and distributes its goods in over ten countries. BDJ Oxides, a material subsidiary of J.G Chemicals, is India’s only zinc oxide manufacturer with IATF certification, which is favored by tyre manufacturers.
J.G. Chemicals Ltd. IPO Objectives
The company intends to utilise the net proceeds from the fresh issues for the following purposes.
- For repayment and prepayment of certain market borrowings
- To meet capital expenditure requirements for establishing a research and development centre.
- To meet capital expenditure requirements.
Should you invest in J.G. Chemicals Ltd.?
Here are the top reasons to consider before investing in J.G.Chemicals Ltd. IPO.
- With a 30% market share, the company is one of the top ten zinc oxide manufacturers in terms of output and sales.
- J.G. Chemicals, India’s largest zinc oxide manufacturer, serves 200+ domestic and 50+ international customers.
- It has robust financial and operational track records.
- It is one of the organised companies in India’s highly fragmented zinc oxide market, which is expected to be worth over 20,000 million in FY22.
J.G. Chemicals Ltd IPO Financials
| Particulars | Period ending on September 30, 2022 | Year ending on March 31, 2022 | Year ending on March 31, 2021 |
|---|---|---|---|
| Revenue from Operations | 4,250.72 | 6,128.30 | 4,352.98 |
| Profit After Tax (PAT) | 357.13 | 431.26 | 287.99 |
| PAT Margin | 8.40% | 7.04% | 6.62% |
| EBITDA | 523.14 | 663.78 | 486.07 |
| EBITDA Margin | 12.31% | 10.83% | 11.17% |
| EPS (Basic) | 10.93 | 12.61 | 7.39 |
| ROE | 20.40% | 30.64% | 24.23% |
J.G. Chemicals Ltd Noteworthy highlights
- The rubber and tyre manufacturing business is one of the company’s key consumers, accounting for 89.66% of revenue from operations in the fiscal year ended September 30, 2022.
- J.G. Chemicals has grown at a CAGR of 12.10% during the last five fiscal years.
Know Us before investing
Strengths
- A well-diversified customer base and customer-focused marketing strategy have helped the company become one of the top global players.
- Zinc oxide is a critical raw material for several industries, including tyre manufacturing, pharmaceuticals, chemicals, and agriculture.
- A high entry barrier allows the existing players larger shares of the market.
Risks
- A significant part of the revenue comes from selected customers.
- The company depends primarily on the performance of the rubber industry to earn revenue.
- The company doesn’t enter into long-term agreements with its suppliers. Hence, its production depends on the availability of raw materials.
J G Chemicals IPO FAQs :
Q1. What is J.G.Chemicals Ltd. IPO?
Ans. The total issue size of J.G.Chemicals Ltd. is Rs. 252 crore.
Q2. When will the J.G.Chemicals Ltd. IPO allotment available?
Ans. Will be updated soon.
Q3. What will be the J.G.Chemicals Ltd. IPO lot size?
Ans. Will be updated soon.
Q4. When will J.G.Chemicals Ltd. IPO open for subscription?
Ans. Will be updated soon.
Q5. What minimum lot size can retail investors subscribe to?
Ans. Retail investors can apply for a minimum of one lot.
Q6. When will J.G.Chemicals Ltd. list on exchanges?
Ans. Will be updated soon.
Q7. What would be the listing gains on the J.G.Chemicals Ltd. IPO?
Ans. Listing gains cannot be calculated before the listing of the IPO on the stock exchange.
Q8. I have finished the application process for J.G.Chemicals Ltd. IPO, but the funds are not yet debited. What is the reason?
Ans. At the first step, the bank only blocks the amount in your account. The money will be debited when the shares are allotted or unblock the amount after the UPI mandate expiry date.
Q9. How to approve the UPI mandate request for J.G.Chemicals Ltd. IPO?
Ans. Login to your UPI handle to approve the payment mandate and complete the IPO application process.
Q10. Can I submit more than one application for the public issue of J.G.Chemicals Ltd. using one PAN?
Ans. You are allowed to submit only one application using one PAN card.
Q11. What is the minimum order quantity for J.G.Chemicals Ltd. IPO?
Ans. Will be updated soon.
