JG Chemicals Ltd has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi) to raise funds through an initial public offering.
The IPO consists of a fresh issue of Rs 202.50 crore and an offer-for-sale of up to 5.70 million shares by its existing shareholders and promoters.
The OFS comprises up to 3.64 million shares by Vision Projects and Finvest Pvt Ltd, 1.4 lakh shares by Jayanti Commercial Ltd, 1.27 million shares by Suresh Kumar Jhunjhunwala (HUF) and 6.5 lakh shares by Anirudh Jhunjhunwalal (HUF).
The proceeds from the fresh issue will be used for investment in its material arm BDJ Oxides. The company will use Rs 45 crore for repayment of debt, Rs 5.31 crore to set up a research and development centre, Rs 65 crore for funding its long-term working capital requirement for its subsidiary and Rs 35 crore for its own long-term working capital requirement.
As of December 2022, the total outstanding borrowings of BDJ Oxides amounted to Rs 54.65 crore.
Centrum Capital and Emkay Global Financial Services are the book running lead managers to the issue.
JG Chemicals is India's largest zinc oxide manufacturer and the tyre industry are the largest consumers of this product. The company is also a leading supplier of paints manufacturers, footwear players and cosmetics players in India.
As on October 31, 2022, its aggregate installed capacity of 77,040 MTPA is spread across its three manufacturing facilities located at Jangalpur (West Bengal); Belur (West Bengal); and Naidupeta (Andhra Pradesh).
For the fiscal year 2022, the company reported a revenue of Rs 612.83 crore against Rs 435.30 crore a year ago. Net profit for the period stood at Rs 43.13 crore as against Rs 28.80 crore last year. Profit margin improved to 7.04 percent from 6.62 percent last year.