JG Chemicals, India’s leading zinc oxide manufacturer in terms of both production and revenue, has submitted initial documents to the Securities and Exchange Board of India (Sebi) to fund their company through an initial public offering (IPO).
According to the draft red herring prospectus (DRHP), the IPO consists of a fresh issue of equity shares worth up to ₹ 202.50 crore and an offer-for-sale (OFS) of 57 lakh (5.7 million) equity shares by the company’s existing promoter group shareholders.
As part of the offer-for-sale (OFS), Vision Projects & Finvest Pvt Ltd will sell 36.40 lakh (3.64 million) shares, Suresh Kumar Jhunjhunwala (HUF) will divest 12.70 lakh (1.27 million) shares, Anirudh Jhunjhunwala (HUF) will sell 6.50 lakh (650,000) shares, and Jayanti Commercial Ltd will offer 1.40 lakh (140,000) equity shares.
The company is considering the option of a pre-IPO placement of equity shares totaling ₹ 40 crore or a secondary sale of ₹ 28.50 lakh (2.85 million) equity shares by its selling shareholders, or a combination of both. If either of these placements are carried out, the size of the fresh issue or offer-for-sale portion will be reduced accordingly.
The proceeds from the fresh issue of equity shares will be used to invest in its material subsidiary, BDJ Oxides. ₹ 45 crore will be used to repay borrowings taken out by its subsidiary, ₹ 5.31 crore will be used to set up a research and development center, and ₹ 65 crore will be used to fund the long-term working capital needs of its material subsidiary. ₹ 35 crore will also be used to fund the long-term working capital requirements of the company and for other general corporate purposes.
JG Chemicals, based in Kolkata, is India’s leading zinc oxide manufacturer in terms of both production and revenue. The company sells over 80 grades of zinc oxide and is among the top ten manufacturers of zinc oxide globally.
The company’s equity shares are planned to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
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