Zinc King JG Chemicals IPO Gets Janata Subscriptions

Retail, NII lead the demand, Issue subscribed 2.47 times on Day 1.
MUMBAI, Mar 5 (The CONNECT) – The Initial Public Offering of JG Chemicals Limited was subscribed 2.47 times on the first day of bidding, today.
The issue received bis for 2,01,54,538 shares against the offered 81,68,714, at a price band of ₹210-221, according to the data available on the stock exchanges.
Retail portion was subscribed 3.64 times and Non-Institutional Investors segment 2.9 times. Qualified Institutional Buyers just stated chipping for the issue that will close on Thursday.
The company has raised Rs 75.35 crores from anchor investors. Foreign and Domestic Institutions who participated in the anchor were Massachusetts Institute of Technology, Carnelian, Pinebridge and SBI General Insurance Company.
Leading brokerage firms like Ventura Securities, BP Wealth, AnandRathi and Reliance Securities have given a “Subscribe” rating to J.G.Chemicals Ltd, given its dominant market position, diversified customer base and has built a long-standing relationship with customers across end-user industries.
JGCL is the largest manufacturer of zinc oxides in India and among the top ten manufacturers of zinc oxides globally. The company also enjoys high entry barriers in the form stringent vendor approval process, raw material tie-ups and technical expertise.
The company is also expanding its production capacities and R&D capabilities to further diversify their product offerings and enter new verticals.
Its dependence on one principal product, select customers and the rubber and tyre industry for its revenue are pointed out as key risks of the company by the brokers.
Centrum Capital Limited, Emkay Global Financial Services Limited, and Keynote Financial Services Limited are the book running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.
Company Information: J.G. Chemicals along with its subsidiary are India’s largest zinc oxide manufacturer in terms of production and revenue through French process, with a market share of around 30% as of March 2022. It uses French process for the manufacturing zinc oxide, a dominant production technology for producing zinc oxide adopted by all the major producers in Americas, Europe and Asia, per CARE Report.
It sells over 80 grades of zinc oxide and are among the top ten manufacturers of zinc oxides globally. Companies in the tyre industry in India are the largest consumers of its product. The Company also supplies to leading paints manufacturers, footwear players and cosmetics players in India.
Its product caters to a wide spectrum of industrial applications, including in the rubber (tyre & other rubber products), ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, speciality chemicals, lubricants, oil & gas and animal feed.
From Fiscals 2017 to 2021, tyre production in India has grown at a CAGR of 0.32%, according to a CARE Report, whereas in the same period, the Company’s volumes have grown at a significantly higher CAGR of 13.32%. Despite the slow growth of the Company’s biggest end-use industry customer, it has been able to grow primarily on account of inter alia its long-term relationships with tyre companies which have been developed through the products it offers them; its ability to scale up production and quality systems as per the customer requirements; certainty of and on time supply of its products to its customers; and its ability offer the right quality at the right price to its customers.