Investors were left disappointed as JG Chemicals made its market debut at a 5.4 percent discount from the issue price of Rs 221 on March 13. This listing fell short of analysts’ expectations, who had anticipated a premium of 12 percent.
JG Chemicals’ initial public offering (IPO) amounted to Rs 251 crore and garnered substantial interest, being oversubscribed 27.78 times. Non-institutional investors exhibited the highest enthusiasm, subscribing 46.33 times their allotted shares. Qualified institutional buyers also showed strong interest, subscribing 32.09 times their share quota, while retail investors subscribed 17.44 times their portion.
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JG Chemicals stands as India’s premier zinc oxide manufacturer, catering to leading tire manufacturers across the globe. The company’s revenue stream is predominantly anchored in repeat business, accounting for over 90 percent, a testament to its steadfast and enduring relationships with end-users over the long haul.
The Draft Red Herring Prospectus (DRHP) for JG Chemicals revealed that besides serving nine of the top 10 global tire manufacturers and all 11 leading tire manufacturers in India, the company also supplies products to prominent paint manufacturers, footwear companies, and cosmetics players in the Indian market.
JG Chemicals has outlined its allocation plans for the net fresh issue proceeds, with Rs 91 crore designated for its material subsidiary, BDJ Oxides, and Rs 35 crore earmarked for long-term working capital needs. The company intends to utilize the remaining funds for general corporate purposes.
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