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

J.G. Chemical Limited IPO Details:

Open Date: Mar 05 2024
Close Date: Mar 07 2024
Total Shares: 11,366,063
Face Value: ₹ 10 Per Equity Share
Issue Size: 251.19 Cr.
Lot Size: 67 Shares
Issue Price: ₹ 210 - 221 Per Equity Share
Listing At: NSE,BSE
Listing Date: Mar 12 2024

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:

A. Balance Sheet
Particular (In Million) Mar-21 Mar-22 Mar-23
Equity Share Capital 12.2 12.2 317.2
Reserves 1,073 1,514 1,759
Borrowings 745 939 704
Trade Payables 72 53 84
Other Liabilities 198 123 114
Total Liabilities 1,015 1,115 901
Net Block 224 224 353
Capital Work in Progress 0.4 74 9
Investments 86 85 30
Other Assets 33 22 23
Total NC Assets 344 404 415
Receivables 898 948 1,156
Inventory 486 883 1,038
Cash & Bank 52 81 49
Other Assets 320 326 320
Face value 10 10 10
B. Profit & Loss Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Sales 4,353 6,128 7,846
Raw Material Cost 3,454 5,063 6,369
Purchases of Stock In Trade 5 5 0
Change in Inventory 31 -109 -28
Employee Cost 103 133 148
Other Expenses 325 475 602
Other Income 51 102 96
Depreciation 23 27 34
Interest 51 63 50
EBITDA 486 664 851
EBITDA Margin 11.17% 10.83% 10.85%
Profit before tax 412 574 767
Tax 124 143 199
Net profit 288 431 568
NPM (%) 6.54% 6.92% 7.15%
C. Cash Flow Statement
Particular (In Million) Mar-21 Mar-22 Mar-23
Cash From Operating Activity
Profit From Operation 460 638 862
Receivable -398 -50 -211
Inventory -31 -396 -156
Payable 71 -61 -2
Loans And Advances -84 94 13
Working Capital Changes -442 -413 -355
Direct Taxes 92 157 195
Net Cash Inflow from Operating Activity -73 68 312
Cash from Investing Activity
Fixed assets purchased -54 -90 -99
Fixed assets sold 0.4 3 0.2
Investments purchased -155 -76 -178
Investment sold 150 103 225
Dividends received 1 1 0.1
Other investing items 1 4 3
Net cash inflow from investing activities -56 -54 -49
Cash from Financing Activity
Proceeds from shares 0 -51 0
Proceeds from borrowings 301 148 40
Repayment of borrowings -81 -26 -276
Intrest paid fin -51 -74 -50
Net Cash Flow 40 11 -23

Comparison With Peers:

Name of the Company Revenue (In Crore) PAT (In Crore) EPS ( in Rs) P/E CMP Mcap (In Crore)
J.G.Chemicals Limited 785 57 14.49 15.2 221 866
Rajratan Global Wire Limited 895 100 19.72 46.1 653 3,317
NOCIL Limited 1,617 149 8.95 36.7 263 4,389
Yasho Industries Limited 670 64 56.41 43.3 2,100 2,394
* All the data is as per FY23.

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

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