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It has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
JG Chemicals IPO price band has been set in the range of ₹210 to ₹221 per equity share of the face value of ₹10. Investors can bid for a minimum of 67 equity shares and in multiples of 67 equity shares thereafter. JG Chemicals raised ₹75.35 crore from anchor investors on Monday, March 4.
Also Read: JG Chemicals IPO: Issue oversubscribed on day 2 led by retail investors, NIIs; check GMP
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In terms of both output and income, JG Chemicals is India’s largest manufacturer of zinc oxide, according to the Red Herring Prospectus (RHP).
The firm is one of the top 10 producers of zinc oxides worldwide and distributes more than 80 grades of the metal.
As per the RHP, the company’s listed peers are Rajratan Global Wire Ltd ( with a P/E of 33.43), NOCIL Ltd (with a P/E of 30.97), and Yasho Industries Ltd (with a P/E of 30.03).
Also Read: JG Chemicals IPO oversubscribed: GMP, subscription status to review. Should you apply?
JG Chemicals IPO details
JG Chemicals IPO, which is worth 251.19 crore, comprises a fresh issue of ₹165 crore, and an offer-for-sale (OFS) of up to 3,900,000 equity shares of face value of R10, aggregating to ₹86.19 crore, each by the promoters and other investors.
The selling shareholders are Vision Projects & Finvest Private Ltd (offloading up to 2,028,900), Jayanti Commercial Limited (selling up to 1,100 equity shares), Suresh Kumar Jhunjhunwala (HUF) (selling up to 1,260,000 equity shares), and Anirudh Jhunjhunwala (HUF) (offloading up to 610,000 equity shares).
The net proceeds will be used for the following purposes by the company: investing in the Material Subsidiary, BDJ Oxides; (i) repaying or prepaying all or some of the borrowings that the Material Subsidiary has taken out; (ii) financing the capital expenditures needed to establish a research and development centre in Naidupeta; and (iii) financing the extended working capital needs of the company.
The book running lead managers of the JG Chemicals IPO are Centrum Capital Limited, Emkay Global Financial Services Ltd, and Keynote Financial Services Ltd. The registrar of the offering is Kfin Technologies Limited.
JG Chemicals IPO GMP today
JG Chemicals IPO grey market premium is +25. This indicates JG Chemicals share price were trading at a premium of ₹25 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of JG Chemicals share price was indicated at ₹246 apiece, which is 11.31% higher than the IPO price of ₹221.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
JG Chemicals IPO Review
Dilip Davda
“The company is India’s largest zinc oxide manufacturer serving to almost all top tyre manufacturing companies globally. After posting growth in its top and bottom lines for FY21 to FY23, it marked degrowth for 9M-FY24 on account of drastic fall in zinc oxide prices globally. As the reversal in trends are witnessed, the company will be back on track soon. Though based on FY24 annualized earnings, the issue appears fully priced, it is worth considering for the medium to long term rewards,” said Dilip Davda, the contributing editor at Chittorgarh.
Hem Securities
The brokerage claims that the company is bringing the offering at a price range of ₹210–221 per share, with a P/E multiple of 35x based on H1FY24 PAT. With a diverse client base that includes all 11 Indian tyre manufacturers and nine out of the top ten worldwide tyre manufacturers, the company enjoys a leading market position.
High entry barriers are seen in important end-use sectors. The company’s revenue from operations and profit after tax grew at a CAGR of 34.2825% and 40.43%, respectively, from FY21 to FY23, demonstrating strong and steady financial success.
“Also, company has long-term relationships with customers and suppliers & having robust supply chain with more than 250 customers in last 3 years. Company has Experienced and dedicated management team; and has focus on long term sustainability with environmental initiatives and safety standards. Hence ,looking after all above we recommend “Subscribe” on issue,” the brokerage said.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
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Published: 07 Mar 2024, 08:43 AM IST