JG Chemicals IPO Fails to Impress on Debut, Investors Wary Despite Positive Response During Bidding

Shares of JG Chemicals Ltd had a lackluster debut on Dalal Street, failing to meet market expectations despite receiving a positive response during the IPO bidding phase. Investors are now cautious about the future trajectory of the company.

JG Chemicals’ shares opened at a discounted price on both the BSE and the NSE, dipping further during the initial trading session. The broader market decline intensified the selling pressure on the debutant stock, leading to significant losses.

The disappointing listing performance has raised doubts about investor confidence in JG Chemicals’ prospects. According to Shivani Nyati, Head of Wealth at Swastika Investmart, investors should closely monitor the company’s performance and market conditions. Long-term investors may consider maintaining a position with a stop loss strategy.

JG Chemicals, a Kolkata-based zinc oxide producer, issued its IPO in the price range of Rs 210-221 per share. The company raised Rs 251.19 crore through the primary offering, which included a fresh share sale and an offer-for-sale.

During the IPO bidding phase, JG Chemicals garnered a subscription of 27.78 times, with particular interest from non-institutional and qualified institutional bidders. Retail investors also showed strong participation, subscribing to the issue 17.44 times.

Prashanth Tapse, Senior VP at Mehta Equities, noted that the subdued listing was expected given the current market sentiment and sector-wide selling pressure. He advised conservative investors to consider exiting on listing day and recommended a wait-and-watch approach for others.

JG Chemicals, established in 1975, manufactures over 80 grades of zinc oxide with diverse industrial applications in India. The company’s products cater to sectors such as ceramics, paints, pharma, electronics, agrochemicals, and more.