J.G. Chemical Limited IPO

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i. J.G. Chemical is India’s largest zinc oxide manufacturer in terms of production and revenue for zinc oxide manufacturing through French process, which is the dominant production technology for producing zinc oxide and has been adopted by all the major producers in Americas, Europe and Asia. The market share of the Company is around 30%. They sell over 80 grades of zinc oxide and are among the top ten manufacturers of zinc oxides globally.

ii. Their 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.

iii. Owing to the legacy of over four decades in manufacturing businesses, the company benefits from its experience in catering to a wide array of customers and they have built a long-standing relationship with customers across end-user industries in the tyres, ceramics, rubber, paints, cosmetics and batteries industry. Over the last three years, they marketed and sold its product to over 200 domestic customers and over 50 global customers in more than 10 countries.

iv. In India, tyre industry accounts for 70% of rubber consumption (Source: CARE Report) and the companies in the tyre industry are the largest consumers of our product.

v. Along with being suppliers to 9 out of top 10 global tyre manufacturers and to all of the top 11 tyre manufacturers in India, they also supply to leading paints manufacturers, footwear players and cosmetics players in India

Competitive Strengths
i. Leading market position with a diversified customer base.
ii. High entry barriers in key end-use industries
iii. Strong and consistent financial performance

 

Objects of the J.G. Chemical Limited IPO:

The Offer comprises the Fresh Issue and an Offer for Sale. The Company intends to utilize the Net Proceeds towards the following objects: i. Investment in our Material Subsidiary, viz. BDJ Oxides (a) repayment or pre-payment, in full or in part, of all or certain borrowings availed by the Material Subsidiary; (b) funding capital expenditure requirements for setting up of a research and development centre situated in Naidupeta (“R&D Centre”); and (c) funding its long-term working capital requirements ii. Funding long-term working capital requirements of the Company iii. General corporate purposes
DRHP of J.G. Chemical Limited IPO

J.G. Chemical Limited IPO Details:

Promoters And Management:

Suresh Jhunjhunwala aged 69 years is an Executive Chairman and Whole-time Director of the Company. He has passed Bachelor of in Commerce (Part- I) Honours Examinations of University of Calcutta in 1972. He is responsible for strategy formulation and identifying new growth areas for the Company. He has been associated with the Company since its incorporation and has over 35 years of experience in chemical and speciality chemical industry. Anirudh Jhunjhunwala aged 43 years is a Managing Director and CEO of the Company. He holds a bachelors’ degree of Commerce from Calcutta University and holds a master’s degree in business administration from University of Warwick. He is responsible for the overall business activities of the Company. He has been associated with the Company since its incorporation and has over 20 years of experience in chemical and speciality chemical industry. Anuj Jhunjhunwala aged 39 years is a Whole-time Director and CFO of the Company. He holds a bachelors’ degree of Commerce from Calcutta University and a masters’ degree of science in finance from the ICFAI University, Dehradun. He has completed a course on options, futures and other financial derivates from the London School of Economics and Political Science and he is member of Council of Chartered Financial Analysts. Further, he holds a master’s degree in business administration from Said Business School, University of Oxford. He has been associated with the Company since March 7, 2022. He has over 14 years of experience. In the past, he was associated with Greater Pacific Capital India Private Limited from October 2007 to June 2009 and is currently associated with the Material Subsidiary, BDJ Oxides Private Limited since November 2010.  

Financials of J.G. Chemical Limited IPO:

Pariculares ( In Crore ) 2020 2021 2022
Revenue from Operations 399 435 612
Other Income 7 5 10
Total Revenue 407 440 623
Cost of Materials Consumed 339 345 506
Purchases of stock-in-Trade 1.93 0.51 0.49
Changes in Inventories -1 3 -10
Employee Benefits Expense 9 10 13
Other Expenses 30 32 47
EBITDA 27 48 66
Depreciation & Amortisation 1 2 2
Finance Cost 6 5 6
EBIT 25 46 63
OPM (%) 6.66% 11.04% 10.65%
PBT 19 41 57
PAT 13 28 43
NPM (%) 3.43% 6.56% 6.94%
No.of Shares Na Na Na
EPS Na Na Na

Comparison With Peers:

As Per DRHP there is no listed shares in India.

Recommendation on J.G. Chemical Limited IPO:

To be updated once J.G. Chemical files for RHP.

Lead Manager of J.G. Chemical Limited IPO:

  1. Emkay Global Financial Services
  2. Keynote Corporate Services Limited

Registrar of J.G. Chemical Limited IPO:

  1. Kfin Technology Private Limited

Company Address:

34A, Metcalfe Street, Kolkata – 700 013, West Bengal, India

Discussion on J.G. Chemical Limited IPO:

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