JG Chemicals Limited’s IPO consists of a fresh issue of 74 lakh shares worth INR 165 crores and an offer to sell 39 lakh existing equity shares worth INR 86.19 crores. The company seeks funds to invest in a material subsidiary and to meet the working capital requirement.
JG Chemicals IPO – Important Details
| JG Chemicals IPO Date | March 5, 2024 to March 7, 2024 |
| JG Chemicals IPO Listing Date | March 13, 2024 |
| JG Chemicals IPO Price | INR 210-221 per share |
| JG Chemicals IPO Lot Size | 67 Shares |
| JG Chemicals IPO Total Issue Size | INR 251.19 crores |
| JG Chemicals IPO Basis of Allotment | March 11, 2024 |
| JG Chemicals IPO Initiation of Refunds | March 12, 2024 |
| JG Chemicals IPO Credit of Shares to Demat | March 12, 2024 |
| JG Chemicals IPO Issue Type | Book Built Issue |
| JG Chemicals IPO Listing At | BSE NSE |
JG Chemicals Limited IPO – Company Profile
The company 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 and has been adopted by all the major producers in the Americas, Europe, and Asia. As of March 2022, the company’s market share is around 30%.
The company sells over 80 grades of zinc oxide and is among the top ten manufacturers of zinc oxides globally. The company owes to its legacy of four decades in the manufacturing industry.
The company has built a long-standing relationship with customers across end-user industries in the tyres, ceramics, rubber, paints, cosmetics, and batteries industries. Over the last three years, the company has marketed and sold products to over 200 domestic customers and over 50 global customers in more than 10 countries. In India, tyre industry accounts for 70% of rubber consumption and the companies in the tyre industry are the largest consumers of JG Chemical’s products.
JG Chemicals IPO – Fundamental Analysis
JG Chemicals’ IPO financials reveal a trajectory of steady revenue growth, enhanced profitability, and solid financial health improvements, positioning it as an appealing investment in the chemical sector with strong growth potential and robust operational efficiency.
Revenue Growth:
The company has witnessed consistent revenue growth, from ₹4,352.98 million in FY2021 to ₹7,845.76 million in FY2023, indicating an expanding operation and increasing market demand for its products.
Equity Growth:
Equity has nearly doubled from ₹1,190.04 million in FY2021 to ₹2,135.28 million in FY2023, reflecting strong investor confidence and possibly successful capital management to fuel further growth.
Profitability:
Profit after tax has significantly improved, increasing to ₹567.93 million in FY2023, showcasing the company’s ability to enhance its operational efficiency and profitability.
Return on Net Worth (RoNW):
The RoNW has seen a positive trend, peaking at 27.49% in FY2023. This indicates the company’s efficiency in generating profit from shareholders’ equity, maintaining a strong performance.
Diluted EPS:
The Diluted EPS has consistently increased, highlighting the company’s growing earnings power per share, a positive indicator for investors.
Asset and Liability Management:
Total assets have grown alongside the company’s expansion. A significant reduction in total liabilities in FY2023 alongside equity growth indicates improved financial stability and a solid balance sheet.
Debt to Equity Ratio:
The debt-to-equity ratio has decreased from 0.69 in FY2021 to 0.34 in FY2023, signaling a healthier financial structure with reduced leverage.
JG Chemicals IPO Financial Information
| Particular | As of 31 March 2021 | As of 31 March 2022 | As of 31 March 2023 |
| Revenue (₹ in millions) | 4,352.98 | 6,128.30 | 7,845.76 |
| Equity (₹ in millions) | 1,190.04 | 1,566.38 | 2,135.28 |
| Expenses (₹ in Million) | 3,992.06 | 5,656.01 | 7,174.95 |
| Profit and Loss After Tax (₹ in millions) | 287.99 | 431.26 | 567.93 |
| RoNW (%) | 21.61% | 27.09% | 27.49% |
| Diluted EPS only (₹) | 7.39 | 12.61 | 17.32 |
| NAV per Equity Share (₹) | 34.20 | 46.55 | 63.02 |
| Total Assets (in millions) | 2,099.37 | 2,641.41 | 2,977.90 |
| Total Liabilities (in millions) | 909.32 | 1,075.03 | 742.62 |
| Debt-Equity Ratio | 0.69 | 0.62 | 0.34 |
JG Chemicals IPO Peer Comparison
J.G. Chemicals Limited demonstrates impressive profitability and efficiency with a total income of ₹7,941.88 million and a RoNW of 27.49%. Despite lacking a P/E ratio, it competes favorably with peers, showcasing strong earnings per share and a solid NAV, indicating robust financial health.
| Company | Total Income (₹ in millions) | P/E Ratio (Times) | EPS (Basic) (₹) | EPS (Diluted) (₹) | RoNW (%) | NAV per Equity Share (Basic) (₹) |
| J.G.Chemicals Limited | 7,941.88 | NA | 17.32 | 17.32 | 27.49% | 63.02 |
| Rajratan Global Wire Limited | 8,986.80 | 33.43 | 19.72 | 19.72 | 22.79% | 86.54 |
| NOCIL Limited | 16,228.10 | 30.97 | 8.95 | 8.92 | 9.61% | 93.14 |
| Yasho Industries Limited | 6,825.95 | 30.03 | 59.54 | 59.54 | 28.52% | 208.75 |
JG Chemicals Ltd IPO Objective
The main objective of JG Chemical’s IPO is to invest INR 91.05 crores in subsidiary BDJ Oxides, allocating funds for loan repayment, R&D center setup, and long-term working capital. Additionally, INR 35 crores will support the company’s working capital needs.
- Invest in material subsidiary- BDJ Oxides: The company plans to invest INR 91.05 crores in its subsidiary BDJ Oxides for three purposes.
- To fund INR 25 crores to repay the borrowings of its subsidiary.
- To fund INR 6.05 crores capital expenditure requirements for setting up an R&D center in the subsidiary.
- To fund INR 60 crores to meet the long-term working capital requirement of the subsidiary.
- To fund the working capital requirements: The company’s business is working capital intensive, and hence, the company will utilize INR 35 crores to fund its working capital requirements.
JG Chemicals Ltd IPO Risks And Challenges
JG Chemical’s risk includes dependency risk as 99% of its revenue comes from zinc oxide sales, posing vulnerability to demand fluctuations. Heavy reliance on the rubber and tyre industry lacks diversification, while the top 10 customers contribute 77% of revenue, risking adverse impacts if they shift suppliers.
- Almost 99% of the revenue of the company is generated from the sale of its primary product- zinc oxide. Any reduction in the demand for the same may have an adverse effect on the business and financial performance.
- The operations of the company are heavily dependent on the rubber and tyre industry, and there is a lack of diversification in the business across other Application Industries.
- The top 10 customers contribute almost 77% of the revenue of the company. If one or more of such customers choose not to source their requirements from JG Chemicals, the business, financial condition, and results of operations may be adversely affected.
JG Chemicals Limited IPO – Industry & Market Potential
India ranked sixth in terms of global chemical sales with a contribution of USD 105 billion and accounted for a share of 2.7% during the year. The other nations that formed part of the top 10 countries in global chemical sales were Taiwan, Brazil, Russia, and the UK, with a share of 1.9%, 1.6%, 1.2%, and 1.0%, respectively.
Zinc oxide is an inorganic compound, white in color and insoluble in water. The chemical formula for zinc oxide is ZnO. Zinc oxide is present in the earth’s crust as mineral zincite and usually contains manganese and other impurities. Hence, it is synthetically made for commercial use. Zinc oxide has a lot of properties that make it desirable to various end-user industries. It is used as an additive to various products like rubber, ceramics, cosmetics, food supplements, plastics, paints, sealants, batteries, animal feed, etc.
During the five-year period CY17 to CY21, the global zinc oxide market size grew from USD 4,472 million in CY17 to USD 4,923 million in CY21 and increased at a CAGR (compound annual growth rate) of 2.4% backed by demand from end-user industries.
JG Chemicals IPO – Type of Offer
JG Chemicals plans a fresh issue of shares, seeking INR 165 crores to augment the company’s capital needs and to invest in the material subsidiary. Additionally, the company proposes an offer for sale, intending to sell 39,00,000 existing shares.
- Fresh Issue: The company will issue new shares to raise capital, aiming to collect INR 165 crores. The company intends to utilize the proceeds from the fresh issue to meet working capital needs and to invest in its subsidiary.
- Offer for sale: Atmastco is offering to sell 39,00,000 existing shares. The following is the detail of the existing shareholders:
| Name of the selling shareholder | Maximum number of offered shares for sale (in millions) |
| Vision Projects & Finvest Private Limited | 20,28,900 |
| Jayanti Commercial Limited | 1,100 |
| Suresh Kumar Jhunjhunwala (HUF) | 12,60,000 |
| Anirudh Jhunjhunwala (HUF) | 6,10,000 |
JG Chemicals Ltd IPO Offer Size
The offer size of JG Chemicals Limited’s IPO is INR 251.19 crores, consisting of a fresh issue of 74 lakh shares worth INR 165 crores and an offer to sell 39 lakh existing equity shares worth INR 86.19 crores. The company seeks funds to invest in a material subsidiary and to meet the working capital requirement.
JG Chemicals Limited IPO Allotment Structure
JG Chemicals allocation will be as follows: 75% for Qualified Institutional Buyers (QIB), 15% for Non-Institutional Investors (NII), and 10% for Retail Individual Investors (RII) in accordance with SEBI regulations.
● Qualified Institutional Buyers (QIB): As per SEBI regulations, 75% of the shares offered through the IPO will be reserved for Qualified Institutional Buyers. These include entities such as banks, mutual funds, and insurance companies.
● Non-Institutional Investors (NII): 15% of the shares will be reserved for Non-Institutional Investors. These typically include corporate bodies or individuals investing more than Rs.2 lakhs.
● Retail Individual Investors (RII): The remaining 10% of the shares will be allotted to Retail Individual Investors. These individual investors apply for shares with a total value of less than Rs.2 lakhs.
How to apply for a JG Chemicals IPO?
To apply for the JG Chemicals IPO through Alice Blue, you would typically follow these steps:
1. Open a Demat and Trading Account: If you don’t already have one, you need to open a Demat and trading account with Alice Blue.
2. Check for IPO Details: Once your account is active, you can check for JG Chemicals IPO details in the IPO section of the Alice Blue platform.
3. Place the Bid: Enter the number of shares you wish to buy and place your bid within the IPO’s price band.
4. Submit the Application: Confirm all your details and submit your application.
You can apply for JG Chemical Limited’s IPO at Alice Blue in just a few clicks!
Check Allotment Status: After the allotment process, you can check the allotment status to see if you have received any shares.
Please note that the allotment of shares is not guaranteed and will depend on the demand for the IPO.
How to check JG Chemicals IPO Allotment Status on Alice Blue?
Checking the allotment status of an IPO in Alice Blue is usually straightforward. Please follow these general steps:
1. Log in to your Alice Blue Account: You can do this through the Alice Blue website or their trading app.
2. Navigate to the Portfolio or IPO Section: This might differ based on the layout of Alice Blue’s platform, but generally, you can find the status of your IPO application under the ‘Portfolio’ or ‘IPO’ section.
3. Find the IPO Allotment Status: Look for a sub-section called ‘IPO Allotment Status’ or something similar. This is where you can see the status of the IPOs you have applied for.
4. Select the JG Chemicals IPO: If you have applied for multiple IPOs, there might be a dropdown menu or lists to select the IPO you are interested in. Select the JG Chemicals IPO.
5. Check the Status: The status of your application should be displayed here. If the shares have been allocated to you, it would be mentioned here.
If you face any issues, it’s recommended that you contact Alice Blue’s customer support for detailed assistance.
Apart from Alice Blue, there are other ways to check the allotment status of the JG Chemicals s IPO:
JG Chemicals Limited IPO Offer Registrar
The registrar for JG Chemicals is KFin Technologies Limited. They are responsible for ensuring the IPO allotment and refund processes are carried out smoothly.
Contact information for the registrar:
KFin Technologies Limited
Selenium Tower B, Plot No. 31, 32
Gachibowli, Financial District
Nanakramguda, Serilingampally
Hyderabad, 500 032
Telangana, India
Tel: +91 40 6716 2222
E-mail: [email protected]
Website: www.kfintech.com
JG Chemicals Limited IPO – FAQs
The allotment date of JG Chemicals IPO is March 11, 2024.
The price band of the shares issued by the company is INR 210-221 per share.
JG Chemicals Limited’s IPO consists of a fresh issue of 74 lakh shares worth INR 165 crores and an offer to sell 39 lakh existing equity shares worth INR 86.19 crores. The company seeks funds to invest in a material subsidiary and to meet the working capital requirement.
The listing date of the JG Chemicals IPO is March 13, 2024.
