JG Chemicals disappointed investors after it listed at a discount of 5.4 percent over the issue price of Rs 221 on March 13. The listing was below analysts’ estimates of a premium of 12 percent.
JG Chemicals’ Rs 251-crore initial public offering (IPO) was subscribed 27.78 times, with non-institutional investors taking the lead by subscribing 46.33 times their allotted quota of shares. Qualified institutional buyers bought 32.09 times their quota of shares, while the portion set aside for retail investors was subscribed 17.44 times.
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JG Chemicals is India's largest zinc oxide manufacturer, catering to major tyre manufacturing companies worldwide. The company boasts a revenue stream where over 90 percent is derived from repeat business, emphasising its strong and enduring relationships with end users in the long term.
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In addition to being suppliers to nine out of the top 10 global tyre manufacturers and all of the top 11 tyre manufacturers in India, JG Chemicals also provides products to leading paint manufacturers, footwear players, and cosmetics players in India, the DRHP said.
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JG Chemicals plans to allocate Rs 91 crore from the net fresh issue proceeds for its material subsidiary, BDJ Oxides, and earmark Rs 35 crore for long-term working capital requirements. The remaining funds will be utilized for general corporate purposes.
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