JG Chemicals gets SEBI approval to float IPO

Zinc oxide manufacturer JG Chemicals which has filed preliminary papers has received final observation letter from SEBI to raise funds through initial public offering (IPO) on March 24.

As per DRHP, the IPO comprises fresh issue of equity shares worth Rs 202.50 crore and an offer-for-sale (OFS) of 57 lakh equity shares by its existing promoter group shareholders, according to its draft red herring prospectus (DRHP).

In OFS, Vision Projects and Finvest Pvt Ltd will offload up to 3.64 million shares, Jayanti Commercial Ltd will sell 1.4 lakh shares, 1.27 million shares by Suresh Kumar Jhunjhunwala (HUF) and 6.5 lakh shares by Anirudh Jhunjhunwalal (HUF).

The company will use net proceeds from the fresh issue for investment in its material arm BDJ Oxides, repayment of debt, to set up a research and development centre, for funding its long-term working capital requirement for its subsidiary and self.

The company supplies its products 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.

In Fiscal 2022, the company has reported 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.