JG Chemicals Lists at 4.5% Discount at Rs 211 per share

JG Chemicals is a zinc oxide manufacturer using the French process, debuted on the Indian stock market today.

The J.G. Chemicals stock opened at Rs 211 per share on the BSE, at a discount of 4.52% over the final issue price of Rs 221 per share. The market capitalisation on the BSE stands at Rs 826.83 crore. Conversely, on the NSE, the stock debuted at Rs 209 per share at a discount of 5.43%.

IPO Proceeds

The company intends to utilise the net proceeds for various purposes. These include investing in its Material Subsidiary, BDJ Oxides, which entails repaying or pre-paying certain borrowings, funding capital expenditure for setting up a research and development center in Naidupeta, Andhra Pradesh, and meeting long-term working capital requirements. Additionally, the funds will be allocated towards funding the company’s own long-term working capital requirements and for general corporate purposes.

Business Overview

JG Chemicals Limited was founded in 1975 and is a zinc oxide manufacturer using the French process. The company produces more than 80 grades of zinc oxide.

This product is used in various industrial applications such as ceramics, paints and coatings, pharmaceuticals and cosmetics, electronics and batteries, agrochemicals and fertilizers, specialty chemicals, lubricants, oil and gas, and animal feed.

The company operates three manufacturing facilities in Jangalpur and Belur, both in Kolkata, West Bengal, and Naidupeta in Nellore District, Andhra Pradesh. Naidupeta is the largest facility, owned and operated by the Material subsidiary.

Subscription details

On March 7, 2024, the final day of the IPO window, the IPO witnessed an impressive response, with a subscription rate of 28.52 times. The public issue received remarkable interest, with the retail category being subscribed 18.03 times, while the QIB and NII categories reached a subscription rate of 32.33 and 47.92 times respectively.

The IPO price band was between Rs 210 to Rs 221 per share, with a face value of Rs 10 per share and a lot size of 67 shares. The total size of the company’s IPO was Rs 251.19 crore, and the final share issue price was fixed at Rs 221 each.

Conclusion:

The crucial question that arises in everyone’s mind is whether to hold onto the shares or book profits. Investors who applied for listing gains only have been disappointed, as the shares listed at a discount, may consider closing their positions. On the other hand, investors with a higher risk appetite may opt to hold the shares for the medium to long term, which could prove to be beneficial.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.