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

JG Chemicals IPO: The initial public offering (IPO) of JG Chemicals Limited has opened today. The public issue will remain open till 7th March 2024. This means the initial public offer will be available for subscription from Tuesday to Thursday this week. The Zinc Oxide maker company has fixed the JG Chemicals IPO price band at ₹210 to ₹221 per equity share. The book build issue is proposed for listing on BSE and NSE. The company aims to raise ₹251.19 crore out of which ₹165 crore is aimed through the issuance of fresh shares while the rest ₹86.19 crore is reserved for the Offer for Sale (OFS) route. So, the public issue is a mix of fresh shares and OFS. Meanwhile, ahead of the JG Chemicals IPO subscription opening, shares of the Zic Oxide manufacturer company are available for trade in the grey market. According to the stock market observers, JG Chemicals IPO GMP (grey market premium) today is ₹52. Ahead of the issue opening, the company announced that it has raised ₹75.35 crore from anchor investors.

JG Chemicals IPO subscription status

By 3:24 PM on day one of bidding, the public issue was booked 1.79 times while its retail portion was booked 2.87 times. The NII portion oof the book build issue was subscribed 1.61 times.

Important JG Chemicals IPO details

1] JG Chemicals IPO GMP: Shares of the Zinc Oxide manufacturer company are available at a premium of ₹52 in the grey market today, say market observers.

2] JG Chemicals IPO price: The company has a fixed price band of the public issue at ₹210 to ₹221 per equity share.

3] JG Chemicals IPO date: The book build issue has opened for bidding today and will remain open till 7th March 2024.

4] JG Chemicals IPO size: The company aims to raise ₹251.19 crore from its initial public offer, which is a mix of fresh shares and OFS. Out of this ₹251.19 crore, ₹165 crore is aimed through the issuance of fresh shares while the rest ₹86.19 crore is reserved for the OFS.

5] JG Chemicals IPO lot size: A bidder will be able to apply in lots and one lot of the book build issue comprises 67 company shares.

6] JG Chemicals IPO allotment date: The finalization of share allocation is expected on 8th March 2024.

7] JG Chemicals IPO registrar: KFin Technologies has been appointed as the official registrar of the book build issue.

8] JG Chemicals IPO listing: The public issue is proposed for listing on BSE and NSE.

9] JG Chemicals IPO listing date: The tentative date for share listing is 12th March 2024 i.e. on Tuesday next week.

JG Chemicals IPO review

Giving a 'subscribe' tag to the JG Chemicals IPO, Arun Kejriwal, Founder of Kejriwal Research and Investment Services said, "The company deals in Zinc Oxide and around 85 percent of its revenue comes from the tyre and allied industries. So, the business outlook of the company is looking positive as the auto segment is expected to generate alpha returns in the medium to long term. The public issue has been made available to the primary market investors at attractive valuations as well. One can apply to this IPO depending upon its time perspective as the stock is expected to list at a decent premium and it may scale further upside post-listing."

Advising investors to apply for the public issue for the long term, Prathamesh Masdekar, Research Analyst at Stoxbox said, "For the JG Chemicals Ltd. IPO, we assign a “SUBSCRIBE” rating to the issue as India’s largest zinc oxide manufacturer in production and revenue for zinc oxide manufacturing through the French process. The company plans to establish a greenfield manufacturing facility in Gujarat. Moreover, the company is an approved vendor to most large global tyre companies, with a significant presence in Southeast Asia. Presently, the company’s manufacturing process leads to the generation of zinc ash, which they sell in the market. The company also intends to continue to leverage its direct marketing and distributor network and its industry standing to establish relationships with new export and local customers and expand the customer base. The company also has a record of sustained consolidated revenue from operation, growing at a CAGR of 34.3% during FY21-23."

"With a leading market position and strong customer base, the company maintains high customer retention rates and explores growth opportunities in Southeast Asia. Despite high entry barriers, its certifications and global supplier base ensure continued growth. As we advance, The favourable demand outlook in automotive, rubber, and ceramics, along with the expected revival of the chemical industry in early FY25, positions JG Chemicals for sustained growth and market leadership. The issue is valued at a P/E of 29.6x on the upper price band based on FY24 earnings. While the IPO presents an opportunity for substantial returns, investors must be prepared for potential cyclical returns and a longer investment horizon," the StoxBox expert added.

Arihant Capital Markets and Swastika Investmart have also given a 'subscribe' tag to this 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.