JG Chemicals, a Kolkata-based zinc oxide manufacturer, received the final observation from the Securities and Exchange Board of India (Sebi) to raise funds through an initial public offering. The IPO will consist of a fresh issue of equity shares worth up to Rs 202.5 crore, as well as an offer-for-sale (OFS) component of 5.7 million equity shares. None of the funds raised from the OFS component will be given to the company. 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).
Additionally, in consultation with the merchant bankers, JG Chemicals might consider a private placement of up to Rs 40 crore or a secondary sale by the shareholders of up to 2.85 million equity shares. In the case of such a placement becoming successful, the fresh issue component will be reduced accordingly.
The proceeds from the fresh issue portion of the IPO 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, JG Chemicals is one of India’s largest zinc oxide manufacturers in terms of production and revenue. It has marketed and sold its product to over 200 domestic customers and over 50 global customers in over 10 countries. The firm’s largest consumer is the tyre industry. 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. Centrum Capital