New IPO: JG Chemicals Receives SEBI Approval for Public Offering; Rs 202 crore new issue, OFS of 5.7 million shares

JG Chemicals, a Kolkata-based zinc oxide manufacturer, received final observation from the Securities and Exchange Board of India (Sebi) to raise funds through an IPO. The IPO will consist of a new issue of shares worth up to Rs 202.5 crore plus an offer-for-sale (OFS) component of 5.7 million shares. None of the funds raised from the OFS component are passed on to the company. The OFS includes up to 3.64 million shares of Vision Projects and Finvest Private Limited, 1.4 million shares of Jayanti Commercial Limited, 1.27 million shares of Suresh Kumar Jhunjhunwala (HUF) and 6.5 million shares of Anirudh Jhunjhunwalal ( HOOF).

In addition, JG Chemicals could consider a private placement of up to Rs 40 crore or a secondary sale by shareholders of up to 2.85 million shares in consultation with commercial banks. If such a placement is successful, the share of new issues will be reduced accordingly.

Proceeds from the new offering portion of the IPO will be used to invest in its physical arm BDJ Oxides. The Company will incur Rs 45 crore for debt repayment, Rs 5.31 crore for the establishment of a research and development center, Rs 65 crore for funding its long term working capital needs for its subsidiary and Rs 35 crore for its own long term working capital needs and general corporate purposes.

Founded in 2001 by Suresh Jhunjhunwala, JG Chemicals is one of the largest zinc oxide manufacturers in India in terms of production and sales. It has marketed and sold its products to over 200 domestic customers and over 50 global customers in over 10 countries. The company’s largest consumer is the tire industry. For the 2022 financial year, the company reported revenue of Rs. 612.83 crore compared to Rs. 435.30 crore a year ago. Net profit for the period was Rs 43.13 crore against Rs 28.80 crore last year. Centrum Capital Limited, Emkay Global Financial Services Limited and Keynote Financial Services Limited are the lead bookers of the offering.