- Date : 29/03/2023
- Read: 4 mins
JG Chemicals has received SEBI approval for its IPO, raising funds to fuel expansion plans and strengthen its financial position. Exciting investment opportunity for retail investors.
JG Chemicals Gains SEBI Approval for IPO
Good news for JG Chemicals!
The Securities and Exchange Board of India (SEBI) has granted them permission to launch an initial public offering (IPO).
This means they can now list on the stock market and raise funds from retail investors. With this crucial funding, JG Chemicals can fuel the expansion of its enterprise.
The IPO Proposal
Back in January 2023, JG Chemicals informed the market regulator of their plan to raise capital through a new issue of up to Rs 202.50 crore and an offer-for-sale (OFS) of up to 5.70 million shares. Their proposal was still in draft form when submitted to the regulator.
The OFS involves the sale of shares from Vision Projects and Finvest Pvt Ltd, Jayanti Commercial Ltd, Suresh Kumar Jhunjhunwala (HUF), and Anirudh Jhunjhunwala (HUF).
Plans for the Funds Raised
JG Chemicals has big plans for the funds raised through the IPO. Centrum Capital, Keynote Financial Services Ltd, and Emkay Global Financial Services are managing the issue.
Also Read: IPO Valuation: How is the IPO Price is Decided?
They will use the capital to:
- Purchase additional shares of their subsidiary, BDJ Oxides
- Settle a debt of Rs 45 crore
- Establish a research and development centre with a budget of Rs 5.31 crore
- Fund the long-term working capital requirements of their subsidiary, amounting to Rs 65 crore
- Settle their own long-term working capital requirements, amounting to Rs 35 crore
Addressing BDJ Oxides' Outstanding Borrowings
By the end of 2022, BDJ Oxides, the parent company's subsidiary, had outstanding borrowings totalling Rs 54.65 crore. JG Chemicals is discussing options with merchant bankers to secure additional funds.
They may opt for a combination of a secondary sale by selling stockholders of up to 2.85 million shares or a private placement that could raise up to Rs 40 crore. If a placement is successfully completed, the amount of content in the new issue will be reduced.
JG Chemicals' Operations and Financial Performance
JG Chemicals is known for manufacturing a diverse range of speciality chemicals used in various industries, such as tyre manufacturing, paint, footwear, and cosmetics.
As of October 31, 2022, they operate three manufacturing facilities with a combined installed capacity of 77,040 MTPA in West Bengal's Jangalpur and Belur, as well as Andhra Pradesh's Naidupeta.
Also Read: 7 Pillars of Financial Planning
In the fiscal year 2022, the company generated a revenue of Rs 612.83 crore and a net profit of Rs 43.13 crore, a significant increase from the previous year's Rs 28.80 crore.
The profit margin also improved to 7.04% from 6.62% during the same period.
A Positive Impact on the Speciality Chemicals Sector
JG Chemicals is a prominent player in the speciality chemicals space, and their listing will be a welcome development for the sector.
The funds raised through the listing will provide the company with the resources it needs to execute its expansion plans.
Investors are eagerly anticipating the opportunity to invest in JG Chemicals, and the listing is expected to boost the speciality chemicals sector.
Final Thoughts
The SEBI approval for JG Chemicals' IPO marks a significant milestone for the company and the speciality chemicals sector as a whole. With the funds raised through the IPO, JG Chemicals will have the resources to fuel its expansion plans, invest in research and development, and strengthen its financial position.
This move is expected to create a positive ripple effect across the industry and presents an exciting investment opportunity for retail investors.
The success of JG Chemicals' IPO could potentially pave the way for other companies in the sector to follow suit, further boosting the growth and development of the speciality chemicals industry.
JG Chemicals Gains SEBI Approval for IPO
Good news for JG Chemicals!
The Securities and Exchange Board of India (SEBI) has granted them permission to launch an initial public offering (IPO).
This means they can now list on the stock market and raise funds from retail investors. With this crucial funding, JG Chemicals can fuel the expansion of its enterprise.
The IPO Proposal
Back in January 2023, JG Chemicals informed the market regulator of their plan to raise capital through a new issue of up to Rs 202.50 crore and an offer-for-sale (OFS) of up to 5.70 million shares. Their proposal was still in draft form when submitted to the regulator.
The OFS involves the sale of shares from Vision Projects and Finvest Pvt Ltd, Jayanti Commercial Ltd, Suresh Kumar Jhunjhunwala (HUF), and Anirudh Jhunjhunwala (HUF).
Plans for the Funds Raised
JG Chemicals has big plans for the funds raised through the IPO. Centrum Capital, Keynote Financial Services Ltd, and Emkay Global Financial Services are managing the issue.
Also Read: IPO Valuation: How is the IPO Price is Decided?
They will use the capital to:
- Purchase additional shares of their subsidiary, BDJ Oxides
- Settle a debt of Rs 45 crore
- Establish a research and development centre with a budget of Rs 5.31 crore
- Fund the long-term working capital requirements of their subsidiary, amounting to Rs 65 crore
- Settle their own long-term working capital requirements, amounting to Rs 35 crore
Addressing BDJ Oxides' Outstanding Borrowings
By the end of 2022, BDJ Oxides, the parent company's subsidiary, had outstanding borrowings totalling Rs 54.65 crore. JG Chemicals is discussing options with merchant bankers to secure additional funds.
They may opt for a combination of a secondary sale by selling stockholders of up to 2.85 million shares or a private placement that could raise up to Rs 40 crore. If a placement is successfully completed, the amount of content in the new issue will be reduced.
JG Chemicals' Operations and Financial Performance
JG Chemicals is known for manufacturing a diverse range of speciality chemicals used in various industries, such as tyre manufacturing, paint, footwear, and cosmetics.
As of October 31, 2022, they operate three manufacturing facilities with a combined installed capacity of 77,040 MTPA in West Bengal's Jangalpur and Belur, as well as Andhra Pradesh's Naidupeta.
Also Read: 7 Pillars of Financial Planning
In the fiscal year 2022, the company generated a revenue of Rs 612.83 crore and a net profit of Rs 43.13 crore, a significant increase from the previous year's Rs 28.80 crore.
The profit margin also improved to 7.04% from 6.62% during the same period.
A Positive Impact on the Speciality Chemicals Sector
JG Chemicals is a prominent player in the speciality chemicals space, and their listing will be a welcome development for the sector.
The funds raised through the listing will provide the company with the resources it needs to execute its expansion plans.
Investors are eagerly anticipating the opportunity to invest in JG Chemicals, and the listing is expected to boost the speciality chemicals sector.
Final Thoughts
The SEBI approval for JG Chemicals' IPO marks a significant milestone for the company and the speciality chemicals sector as a whole. With the funds raised through the IPO, JG Chemicals will have the resources to fuel its expansion plans, invest in research and development, and strengthen its financial position.
This move is expected to create a positive ripple effect across the industry and presents an exciting investment opportunity for retail investors.
The success of JG Chemicals' IPO could potentially pave the way for other companies in the sector to follow suit, further boosting the growth and development of the speciality chemicals industry.
