Active Stocks
Fri Apr 12 2024 15:57:45
  1. Tata Steel share price
  2. 163.50 -1.00%
  1. NTPC share price
  2. 362.00 -0.32%
  1. ITC share price
  2. 430.10 -1.56%
  1. HDFC Bank share price
  2. 1,518.90 -1.10%
  1. State Bank Of India share price
  2. 766.75 -1.57%
Business News/ Markets / Ipo/  JG Chemicals IPO: 10 key risks investors should know before subscribing to the issue
BackBack

JG Chemicals IPO: 10 key risks investors should know before subscribing to the issue

JG Chemicals IPO, valued at 251.19 crore, includes a fresh issue of ₹165 crore and an offer-for-sale of up to 3,900,000 equity shares. Listed peers have P/E ratios above 30. Great start on first day of subscription.

JG Chemicals IPO opens for subscription on Tuesday, March 5, and will close on Thursday, March 7. (https://jgchem.com/)Premium
JG Chemicals IPO opens for subscription on Tuesday, March 5, and will close on Thursday, March 7. (https://jgchem.com/)

JG Chemicals IPO has opened for subscription today (Tuesday, March 5), and will close on Thursday, March 7. JG Chemicals IPO had a great start on its first day of subscription.

JG Chemicals IPO price band has been set in the range of 210 to 221 per equity share of the face value of 10. Investors can bid for a minimum of 67 equity shares and in multiples of 67 equity shares thereafter. JG Chemicals raised 75.35 crore from anchor investors on Monday, March 4.

Also Read: JG Chemicals IPO: Issue fully booked on day 1 on strong retail interest. Check GMP, other key details

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

In terms of both output and income, JG Chemicals is India's largest manufacturer of zinc oxide, according to the Red Herring Prospectus (RHP).

Numerous industrial sectors, including the rubber sector (tyres and related products), ceramics, paints and coatings, pharmaceuticals and cosmetics, electronics and batteries, agrochemicals and fertilisers, specialty chemicals, lubricants, oil and gas and animal feed, use the company's products.

Also Read: JG Chemicals IPO oversubscribed: GMP, subscription status to review. Should you apply?

As per the RHP, the company's listed peers are Rajratan Global Wire Ltd ( with a P/E of 33.43), NOCIL Ltd (with a P/E of 30.97), and Yasho Industries Ltd (with a P/E of 30.03).

JG Chemicals IPO, which is worth 251.19 crore, comprises a fresh issue of 165 crore, and an offer-for-sale (OFS) of up to 3,900,000 equity shares of face value of 10, aggregating to 86.19 crore, each by the promoters and other investors.

JG Chemicals IPO details.
View Full Image
JG Chemicals IPO details.

Also Read: JG Chemicals IPO to open tomorrow: GMP, issue details, 10 key things to know before investing to 251.19-crore issue

Here are some of the key risks listed by the company in its Red-Herring Prospectus (RHP):

  • One main product—zinc oxide—in a variety of grades is nearly the sole source of revenue for the firm; any decline in demand for this product might have a negative impact on both the commercial and financial performance of the enterprise.
  • A decline in the performance of its major subsidiary, BDJ Oxides Private Limited, might have a negative impact on the firm's operations, finances, and overall business outlook. This is because the company depends heavily on the business activities of this subsidiary.
  • A substantial portion of the business's revenue comes from a handful of clients. Their business, financial standing, and operational outcomes may suffer if one or more of these clients decide not to purchase from them.
  • The company's logo is not protected by trademark registration. The commercial, financial standing, and operational outcomes of the company might suffer if it is unable to defend its intellectual property rights.
  • The rubber and tyre industries play a major role in the company's activities, and its business is not sufficiently diversified to include other application industries.
  • Obtaining raw materials from foreign vendors is crucial to the company's operations. With its raw material suppliers, the company does not have long-term contracts in place, so any rise in the price or decrease in the availability of these raw materials might negatively impact its commercial and operational outcomes.

Also Read: JG Chemicals IPO: Price band set at 210-221 per share; check issue details, key dates, more

  • Strikes, work stoppages, or rising pay demands from the company's workers or suppliers might have a substantially negative impact on the company's manufacturing operations.
  • During the fiscal year that ended on March 31, 2021, the company's cash flows utilised for operational operations were negative.
  • The firm needs a number of licences and approvals to conduct business, and it might have a negative impact on operations if it is unable to get or maintain these licences and permits on time or at all.
  • The business depends on outside suppliers for logistics and transportation services. Any rise in these entities' fees might have a negative impact on their operations, financial situation, and company.

Also Read: J.G. Chemicals IPO: Zinc oxide maker raises 75.35 crore from anchor investors ahead of public issue

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 05 Mar 2024, 04:13 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App