The commodity chemicals sector presents significant investment opportunities through notable listings like JG Chemicals Limited and Chemplast Sanmar Limited, offering exposure to India’s growing basic chemical manufacturing landscape.
Content:
- Overview of the Commodity Chemicals IPOs in India
- IPO Fundamental Analysis
- IPO Financial Analysis
- About the Company
- Advantages of Investing in Commodity Chemicals Sector IPOs
- Disadvantages of Investing in Commodity Chemicals Sector IPOs
- Role of the Commodity Chemicals Industry in the Economy
- How to invest in Commodity Chemicals IPOs?
- Future Outlook of Commodity Chemicals IPOs in India
- Commodity Chemicals IPOs in India – FAQ
Overview of the Commodity Chemicals IPOs in India
The commodity chemicals sector features prominent listings including JG Chemicals Limited and Chemplast Sanmar Limited, demonstrating robust potential in large-scale chemical manufacturing capabilities.
These offerings enable investors to participate in sector growth while benefiting from increasing industrial demand, stable consumption patterns and expanding applications across manufacturing industries nationwide.
IPO Fundamental Analysis
JG Chemicals Limited
JG Chemicals Limited demonstrated notable financial performance, with a strong focus on operational efficiency and balance sheet improvement. The company’s FY24 figures reflect growth in key areas, despite some challenges compared to FY23. Here’s a detailed breakdown of its financials:
Revenue Trend: Sales for FY24 declined to ₹666 crores from ₹782 crores in FY23, reflecting a -14.83% drop. Expenses also reduced to ₹620 crores from ₹706 crores, stabilizing margins.
Equity and Liabilities: Equity capital rose significantly to ₹39 crores in FY24 from ₹32 crores in FY23. Reserves nearly doubled to ₹359 crores from ₹176 crores. Total liabilities increased to ₹449 crores from ₹298 crores.
Profitability: Operating profit dropped to ₹46 crores in FY24 from ₹76 crores in FY23, with OPM declining to 7% from 10%, signalling a decrease in operating efficiency.
Earnings per Share (EPS): EPS decreased to ₹7.88 in FY24 from ₹17.32 in FY23, showcasing the impact of reduced profitability on shareholder returns.
Return on Net Worth (RoNW): RoNW fell to 10% in FY24 from 20% in FY23, reflecting the decline in profitability despite higher reserves and equity.
Financial Position: Total assets surged to ₹449 crores in FY24 from ₹298 crores in FY23, driven by increased investments (₹43 crores) and other assets (₹364 crores). Borrowings reduced to ₹14 crores from ₹70 crores.
Chemplast Sanmar Limited
Chemplast Sanmar Limited recorded a mixed financial performance in FY24, with declines in revenue and profitability compared to FY23. Key financial metrics reflect operational challenges but steady equity capital and robust financial position despite increased liabilities.
Revenue Trend: Revenue decreased to ₹3,923 crores in FY24 from ₹4,941 crores in FY23, a 20.6% drop. Expenses also reduced to ₹3,897 crores from ₹4,473 crores during the same period.
Equity and Liabilities: Equity capital remained steady at ₹79.06 crores in FY24. Reserves fell to ₹1,587 crores from ₹1,745 crores. Total liabilities rose to ₹6,030 crores compared to ₹5,837 crores in FY23.
Profitability: Operating profit dropped significantly to ₹25.84 crores in FY24 from ₹468.14 crores in FY23. The operating profit margin (OPM) reduced to 0.65% from 9.32%, reflecting a challenging operating environment.
Earnings per Share (EPS): EPS turned negative at -₹10.02 in FY24, compared to ₹9.64 in FY23, indicating a decline in shareholder returns due to the net loss of ₹158.43 crores.
Return on Net Worth (RoNW): RoNW deteriorated further due to the drop in reserves and the net loss recorded, reflecting weakened profitability compared to FY23.
Financial Position: Total assets increased slightly to ₹6,030 crores in FY24 from ₹5,837 crores. Non-current assets grew to ₹4,189 crores, while contingent liabilities rose marginally to ₹529.81 crores from ₹526.84 crores.
IPO Financial Analysis
JG Chemicals Limited
| Mar-24 | Mar-23 | Mar-22 | |
| Sales | 666 | 782 | 611 |
| Expenses | 620 | 706 | 554 |
| Operating Profit | 46 | 76 | 57 |
| OPM % | 7% | 10% | 9% |
| Other Income | 6 | 10 | 10 |
| Interest | 4 | 5 | 7 |
| Depreciation | 5.00 | 3.00 | 3 |
| Profit before tax | ₹ 43.00 | ₹ 77.00 | 57.00 |
| Tax % | 26% | 0 | 0 |
| Net Profit | 32 | 57 | 43 |
| EPS in Rs | 7.88 | 17.32 | 327.95 |
* Consolidated Figures in Rs. Crores
Chemplast Sanmar Limited
| Mar-24 | Mar-23 | Mar-22 | |
| Sales | 3,923 | 4,941 | 5,892 |
| Expenses | 3,897 | 4,473 | 4,695 |
| Operating Profit | 26 | 468 | 1197 |
| OPM % | 1% | 9% | 20% |
| Other Income | 80 | -1 | 57 |
| Interest | 181.00 | 154.00 | 322 |
| Depreciation | ₹ 151 | ₹ 142 | ₹ 137 |
| Profit before tax | -226 | 172 | 796 |
| Tax % | -30% | 11% | 18% |
| Net Profit | -158 | 152 | 649 |
| EPS in Rs | -10.02 | 9.64 | 41.03 |
* Consolidated Figures in Rs. Crores
About the Company
JG Chemicals Limited
JG Chemicals Limited, established in 1975, is a leading Indian manufacturer of zinc oxide, offering over 80 grades for industries like rubber, ceramics, paints and pharmaceuticals. The company focuses on innovation, delivering high-quality products and maintaining a strong market presence.
Their diversified product portfolio and commitment to quality have made JG Chemicals a significant player in India’s chemical manufacturing sector. The company caters to diverse industrial needs while emphasizing growth and sustainability in its operations.
Chemplast Sanmar Limited
Chemplast Sanmar Limited, founded in 1962, specializes in manufacturing speciality paste PVC resins, custom-manufactured chemicals and hydrogen peroxide. The company serves key sectors like agrochemicals, pharmaceuticals and textiles, contributing to India’s industrial development.
With a strong focus on sustainability and vertical integration, Chemplast Sanmar has established itself as a major player in India’s chemical industry. Its innovative products and strategic market presence ensure continued growth.
Advantages of Investing in Commodity Chemicals Sector IPOs
The main advantages include exposure to India’s industrial base, consistent demand patterns, economies of scale benefits and strategic market positioning through established companies like JG Chemicals Limited.
1. Scale Benefits: The sector benefits from large-scale operations, efficient production processes, established distribution networks and strong supplier relationships providing competitive advantages in the market.
2. Stable Demand: Consistent demand from various industries ensures steady revenue streams, predictable growth patterns and reliable market presence across economic cycles.
3. Import Substitution: Domestic manufacturing capabilities reduce import dependencies, support self-reliance initiatives and create cost advantages in serving local market demands.
Disadvantages of Investing in Commodity Chemicals Sector IPOs
The main challenges include raw material price volatility, international competition, environmental regulations and margin pressures, as demonstrated in the performance metrics of companies like Chemplast Sanmar Limited.
1. Price Volatility: Companies face significant impacts from fluctuating raw material costs, energy prices, international market dynamics, supply chain disruptions and currency exchange rate variations.
2. Environmental Compliance: Strict pollution control norms, waste management requirements, safety regulations and sustainability standards necessitate continuous investments in environmental protection measures.
3. Competitive Pressures: Global competition, pricing pressures, capacity utilization challenges and market cyclicality affect profitability and require efficient cost management strategies.
Role of the Commodity Chemicals Industry in the Economy
The commodity chemicals sector drives economic growth through large-scale employment, essential raw material production, export earnings and support to numerous manufacturing industries nationwide.
The industry contributes significantly to industrial output, promotes backward integration, enhances manufacturing capabilities, supports import substitution and strengthens India’s chemical manufacturing base.
How to invest in Commodity Chemicals IPOs?
Start by opening a demat account with Alice Blue, complete comprehensive KYC requirements and thoroughly research upcoming commodity chemical sector IPOs through detailed fundamental analysis.
Monitor SEBI announcements, company prospectuses, market conditions and sector trends and maintain required funds for a timely subscription while following systematic investment approaches.
Future Outlook of Commodity Chemicals IPOs in India
The commodity chemicals sector demonstrates promising growth potential with increasing industrial demand, import substitution opportunities, capacity expansion plans and manufacturing sector growth.
Industry modernization, efficiency improvements and market expansion initiatives indicate positive prospects for future IPOs, supported by growing domestic manufacturing requirements nationwide.
Commodity Chemicals IPOs in India – FAQ
Commodity chemical sector IPOs represent the first public offerings from companies manufacturing basic chemicals, like JG Chemicals Limited and Chemplast Sanmar Limited, enabling participation in industrial growth.
Major listings include JG Chemicals Limited and Chemplast Sanmar Limited, offering investors strategic exposure to large-scale chemical manufacturing capabilities and industrial development opportunities.
Commodity chemical IPOs provide crucial investment opportunities in India’s industrial growth, with companies like JG Chemicals Limited demonstrating the potential for sustainable expansion and profitability.
JG Chemicals Limited marks a significant milestone as a prominent commodity chemicals sector public offering, showcasing strong market interest and setting industry valuation benchmarks.
Begin by opening a trading account through Alice Blue, completing comprehensive KYC requirements, analysing market conditions, studying company fundamentals and maintaining adequate subscription funds.
Commodity chemical sector IPOs offer substantial long-term growth potential, supported by India’s expanding industrial base, import substitution initiatives and stable manufacturing sector demand.
Historical performance indicates strong profitability potential, though returns depend on raw material costs, market cycles, operational efficiencies and company-specific manufacturing capabilities.
Market observers anticipate new commodity chemical sector IPOs, following successful listings like Chemplast Sanmar Limited, driven by manufacturing sector growth opportunities.
Access comprehensive research and analysis through Alice Blue’s dedicated research portal, along with additional information from financial websites, SEBI documentation and industry reports.
Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
