J.G.Chemicals Ltd IPO

J.G.Chemicals is the largest manufacturer of zinc oxides in India and are among the top ten manufacturers of zinc oxides globally, with an installed capacity of 59,904 MTPA for zinc oxide, 7,056 MTPA for zinc ingots and 10,080 MTPA capacity for zinc sulphate and other allied chemicals. The company sells over 80 grades of zinc oxide, thereby enabling it to cater to a wide variety of customers, across various end-use industries.

Entry barriers in their end-use industries stem from unique factors. Their products, subject to high-quality standards and rigorous approval systems, face stringent impurity specifications. The customers, adhering to strict regulatory standards, may incur significant time and expense if they consider changing the product's vendor, acting as a deterrent.

The company has witnessed sustained growth across various financial indicators and consistently enhanced its balance sheet position. Over the last three fiscal periods, there has been a continuous increase in its net worth. Contributions from customers in the rubber industry amounted to Rs. 4,401.21 million, Rs. 7,097.27 million, Rs. 5,521.60 million, and Rs. 3,882.86 million, constituting 90.50%, 90.46%, 90.10%, and 89.20% of the revenue from operations for the nine months ending December 31, 2023, and Fiscals 2023, 2022, and 2021, respectively. From FY17 to FY21, the tyre industry experienced a growth rate of 0.32% (Source: CARE Report), while the company achieved a significantly higher volume growth at a CAGR of 13.32% during the same period.