JG Chemicals Limited IPO - Get Date, Price, Review and Details

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In this article, we will discuss:

• Introduction
• Objects of Issue
• Key Strengths
• Risks
• Financial Snapshots

Introduction:

JG Chemicals is India’s largest zinc oxide manufacturer in terms of production and revenue for zinc oxide manufacturing through the French process. Its products are widely used in industrial applications, such as rubber (tyre & other rubber products), ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, specialty chemicals, lubricants, oil & gas, and animal feed.

The company supplies to 9 out of the top 10 global tyre manufacturers and to all of the top 11 tyre manufacturers in India, as well as they also supply to leading paints manufacturers, footwear players, and cosmetics players in India. 

Objects of Issue:

• Investment in our Material Subsidiary for
• Repayment/ pre-payment of borrowings,
• Funding working capital requirements for setting up of an R&D center in Andhra Pradesh,
• Funding its long-term working capital requirements
• Funding long-term working capital requirements of JG Chemicals Ltd
• Balance General Corporate Purposes

Key Strengths:

• Varied product portfolio catering to diversified industries
• Barriers to entry in this industry are typically high.
• Its in-house R&D facilities have enabled the company to maintain steady growth in sales and profits.

Risks:

• Relying heavily on foreign suppliers without agreements poses a risk. Any rise in raw material costs or shortages could negatively impact the business operations.
• The company needs various licenses and approvals for its operations. Failing to obtain or keep them promptly could harm business operations.
• The company lacks long-term customer agreements, relying only on purchase orders. Losing customers or reduced demand could harm the business significantly.
• Most of the money comes from a small number of customers. Losing just one of them would seriously hurt the company. As of Sep 30, 2023, the top 5 customers make up 81.84% of revenues.
• It operates in a regulated and evolving industry and our products and offerings are subject to changing laws, rules, regulations, and legal uncertainties.

Financial Snapshots