Investors were left disappointed as JG Chemicals made its stock market debut on March 13 at a discount of 5.4 percent compared to the issue price of Rs 221. This listing fell short of analysts’ expectations, who had anticipated a premium of 12 percent.
The initial public offering (IPO) of JG Chemicals, valued at Rs 251 crore, garnered significant attention, with a subscription rate of 27.78 times. Non-institutional investors led the pack, subscribing 46.33 times their allotted quota of shares. Qualified institutional buyers followed suit, oversubscribing by 32.09 times, while retail investors subscribed 17.44 times their allocation.
JG Chemicals holds the distinction of being India’s largest zinc oxide manufacturer, serving major global tyre manufacturers. With over 90 percent of its revenue stemming from repeat business, the company underscores its enduring relationships with end users. Its client portfolio includes nine of the top 10 global tyre manufacturers and all of the top 11 Indian tyre manufacturers, along with leading paint, footwear, and cosmetics companies in India.
As outlined in its Draft Red Herring Prospectus (DRHP), JG Chemicals intends to allocate Rs 91 crore from the net fresh issue proceeds to its material subsidiary, BDJ Oxides, and allocate Rs 35 crore towards long-term working capital requirements. The remainder of the funds will be deployed for general corporate purposes.
