The JG Chemicals Limited IPO experienced impressive subscription levels on Day 3 across various investor categories. Qualified Institutional Buyers (QIBs) subscribed 32.09 times their allotted quota, demonstrating significant institutional interest. Non-Institutional Investors showed even greater enthusiasm, with a subscription rate of 46.33 times. Retail Individual Investors (RIIs) also participated actively, subscribing 17.44 times. Overall, the total subscription reached an impressive 27.78 times, reflecting robust investor confidence and a strong market reception for the company’s public offering.
JG Chemicals Limited IPO – Fundamental Analysis:
JG Chemicals’ IPO demonstrates a promising financial profile with steady revenue increases from ₹4,352.98 million in FY2021 to ₹7,845.76 million in FY2023, and a notable equity growth, nearly doubling in the same period. Profits soared to ₹567.93 million, while Return on Net Worth reached 27.49%, underscoring strong operational efficiency. The company’s improved asset-liability management, significant liabilities reduction, and lower debt-to-equity ratio from 0.69 to 0.34 reflect a robust financial foundation, making it an attractive prospect in the chemical industry.
JG Chemicals Limited IPO – Risks And Challenges:
JG Chemicals Ltd’s IPO reveals significant risks, primarily from its 99% revenue dependence on zinc oxide sales, making it susceptible to market shifts. Its operations are heavily reliant on the rubber and tyre industry, indicating a lack of diversification. Additionally, the company’s top 10 customers account for 77% of its revenue, posing a risk if these key clients switch to other suppliers, which could adversely affect JG Chemicals’ business and financial outcomes.
