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J.G.Chemicals Limited’s Initial Public Offering to open on Tuesday, March 5, 2024, price band set at ₹210/- to ₹221/- per Equity Share

Mumbai, February 29, 2024: J.G.Chemicals Limited, India’s largest zinc oxide manufacturer in terms of production and revenue, has fixed the price band of 210/- to 221/- per Equity Share of face value ₹10/- each for its maiden initial public offer.  The Initial Public Offering (“IPO” or “Offer”) of the Company will open on Tuesday, March 5, 2024, for subscription and close on Thursday, March 7, 2024.  Investors can bid for a minimum of 67 Equity Shares and in multiples of 67 Equity Shares thereafter.

The issue consists of a fresh issue of equity shares worth Rs 1,650 million and an offer for sale (OFS) of up to 3.90 million equity shares by investor selling shareholders.

Proceeds from the fresh issue to the extent of (A) Rs. 910.58 million will be utilised for investing in JG Chemicals’ Material Subsidiary by way of (i) Rs. 600 million for funding its long-term working capital requirements, (ii) Rs 60.58 million for setting up of a research and development centre at Naidupeta, Andhra Pradesh and (iii) Rs 250.00 million for repayment or pre-payment, in full or in part, of all or certain borrowings availed by the Material Subsidiary; (B) Rs 350.00 million will be utilised for funding the long-term working capital requirements of J.G.Chemicals Limited, and (C) general corporate purposes.

J.G. Chemicals along with its subsidiary are India’s largest zinc oxide manufacturer in terms of production and revenuethrough French process, with a market share of around 30% as of March 2022. It uses French process for the manufacturing zinc oxide, a dominant production technology for producing zinc oxide adopted by all the major producers in Americas, Europe and Asia. (Source: CARE Report)

It sells over 80 grades of zinc oxide and are among the top ten manufacturers of zinc oxides globally. Companies in the tyre industry in India are the largest consumers of its product. The Company also supplies to leading paints manufacturers, footwear players and cosmetics players in India.

Its product caters to a wide spectrum of industrial applications, including in the rubber (tyre & other rubber products), ceramics, paints & coatings, pharmaceuticals & cosmetics, electronics & batteries, agro-chemicals & fertilizers, speciality chemicals, lubricants, oil & gas and animal feed.

From Fiscals 2017 to 2021, tyre production in India has grown at a CAGR of 0.32%, according to a CARE Report, whereas in the same period, the Company’s volumes have grown at a significantly higher CAGR of 13.32%. Despite the slow growth of the Company’s biggest end-use industry customer, it has been able to grow primarily on account of inter alia its long-term relationships with tyre companies which have been developed through the products it offers them; its ability to scale up production and quality systems as per the customer requirements; certainty of and on time supply of its products to its customers; and its ability offer the right quality at the right price to its customers.

Centrum Capital Limited, Emkay Global Financial Services Limited, and Keynote Financial Services Limited are the book running lead managers and KFin Technologies Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE.

Disclaimer: J.G.CHEMICALS LIMITED is proposing, subject to receipt of requisite approvals, market conditions and other considerations, to make an initial public offer of its Equity Shares and has filed a red herring prospectus dated February 27, 2024 with the RoC. The RHP is made available on the website of the SEBI at www.sebi.gov.in as well as on the website of the BRLMs i.e., Centrum Capital Limited at www.centrum.co.in, Emkay Global Financial Services Limited at www.emkayglobal.com and Keynote Financial Services Limited at www.keynoteindia.net , the website of the NSE at www.nseindia.com and the website of the BSE at www.bseindia.com and the website of the Company at www.jgchem.com. Any potential investor should note that investment in equity shares involves a high degree of risk and for details relating to such risks, please see the section titled “Risk Factors” beginning on page 33 of the RHP. Potential investors should not rely on the DRHP for making any investment decision and should only rely on the information included in the Red Herring Prospectus.

This announcement has been prepared for publication in India and may not be released in the United States. This announcement does not constitute an offer of securities for sale in any jurisdiction, including the United States. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) or any state securities laws in the United States, and unless so registered, and may not be offered or sold within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. Accordingly, the Equity Shares are being offered and sold outside the United States in “offshore transactions” as defined in and in reliance on Regulation S and the applicable laws of each jurisdictions where such offers and sales are made. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the Company and that will contain detailed information about the Company and management, as well as financial statements. There will be no public offering of the Equity Securities in the United States.

LISTING: The Equity Shares, offered through the Red Herring Prospectus are proposed to be listed on the Stock Exchanges. Our Company has received an ‘in-principle’ approval from the BSE Limited and the National Stock Exchange of India Limited for the listing of the Equity Shares pursuant to their respective letters, each dated March 02, 2023. For the purposes of the Offer, the Designated Stock Exchange shall be BSE Limited. A signed copy of the Red Herring Prospectus and the Prospectus shall be filed with the RoC in accordance with Sections 26(4) and 32 of the Companies Act, 2013. For further details of the material contracts and documents, which will be made available for inspection from the date of the Red Herring Prospectus until the Bid/Offer Closing Date, please see section titled “Material Contracts and Documents for Inspection” on page 418 of the RHP.

DISCLAIMER CLAUSE OF SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”): SEBI only gives its observations on the offer documents and this does not constitute approval of either the Offer or the specified securities stated in the Offer Document. The investors are advised to refer to page 343 of the RHP for the full text of the disclaimer clause of SEBI.

DISCLAIMER CLAUSE OF BSE (the Designated Stock Exchange): It is to be distinctly understood that the permission given by BSE Limited should not in any way be deemed or construed that the RHP has been cleared or approved by BSE Limited nor does it certify the correctness or completeness of any of the contents of the RHP. The investors are advised to refer to the page 346 of the RHP for the full text of the disclaimer clause of BSE.

DISCLAIMER CLAUSE OF NSE: It is to be distinctly understood that the permission given by NSE should not in any way be deemed or construed that the Offer Document has been cleared or approved by NSE nor does it certify the correctness or completeness of any of the contents of the Offer Document. The investors are advised to refer to page 347 of the RHP for the full text of the disclaimer clause of NSE.

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