Kolkata-based Zinc Oxide manufacturer, J.G. Chemicals Ltd has received final observation from the capital markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO).
The company had filed preliminary IPO papers with Sebi on January 4, 2023. The IPO consists of a fresh issue of Rs 202.50 crore and an offer-for-sale of up to 5.7 million equity shares by its existing shareholders and promoters.
The OFS comprises up to 3.64 million equity shares by Vision Projects and Finvest Private Limited, 1.4 lakh equity shares by Jayanti Commercial Limited, 1.27 million equity shares by Suresh Kumar Jhunjhunwala (HUF), and 6.5 lakh equity shares by Anirudh Jhunjhunwalal (HUF).
The company in consultation with merchant bankers to the issue may consider a private placement aggregating up to Rs. 40 crore or a secondary sale by selling shareholders of up to 28,50,000 equity shares or a combination thereof. If such placement is completed, the fresh issue size will be reduced.
The proceeds from the fresh issue will be used for investment in its material arm BDJ Oxides. The company will use Rs 45 crore for repayment of the debt, Rs 5.31 crore to set up a research and development center, Rs 65 crore for funding its long-term working capital requirement for its subsidiary, and Rs 35 crore for its own long-term working capital requirement and general corporate purposes.
Incorporated in the year 2001, by Suresh Jhunjhunwala, J.G.Chemicals Limited is India's largest zinc oxide manufacturer in terms of production and revenue. Over the last three years, it marketed and sold its product to over 200 domestic customers and over 50 global customers in more than 10 countries and tyre industry are the largest consumers of its product.
It supplies to 9 out of top 10 global tyre manufacturers and to all of the top 11 tyre manufacturers in India, and also to leading paints manufacturers, footwear players and cosmetics players in India, according to a CARE Report.
Its Material Subsidiary, BDJ Oxides is the only zinc oxide manufacturing facility in India to have an IATF certification, which is preferred by tyre manufacturers supplying to original equipment manufacturers.
For the fiscal year 2022, the company reported a revenue of Rs 612.83 crore against Rs 435.30 crore a year ago. Net profit for the period stood at Rs 43.13 crore as against Rs 28.80 crore last year.
For the six months ended September 30, 2022, revenue from operations stood at Rs 425.07 crore and net profit stood at Rs 35.71 crore.
Centrum Capital Limited, Emkay Global Financial Services Limited, and Keynote Financial Services Limited are the book-running lead managers to the issue.