Maharashtra-based Gala Precision Engineering has filed draft red herring prospectus (DRHP) with the markets regulator SEBI to raise capital through an initial public offering (IPO).
According to the filing submitted to SEBI on February 14, the IPO will consist of 31,74,416 equity shares. This offering includes a fresh issue of 25,58,416 equity shares by the company, alongside an offer-for-sale of 6,16,000 equity shares by existing shareholders.
In this offer-for-sale, Promoter Vishanji Harshi Gala will be the primary selling shareholder, intending to divest 3,85,200 equity shares. The remainder of the shares, totaling 2,30,800 equity shares, will be sold by Kirit Vishanji Gala (HUF), Nayna Gala, Satish Kotwani, Hemlata Dhiraj Shah, Dhiraj Nanchand Shah, Urmil Dhiraj Shah, and Rupa Sunil Mehta.
Currently, promoters hold a substantial 74.56 percent stake in the company, with the remaining shares held by the public, including Pooja Unichem LLP.
Gala Precision Engineering, known for its precision manufacturing of technical springs such as disc & strip springs (DSS), plans to allocate ₹37 crore from the IPO proceeds towards establishing a new facility in Sriperumbuddur, Tamil Nadu. This new facility will be dedicated to the production of high tensile fasteners and hex bolts, marking a strategic expansion for the company.
Moreover, an amount of ₹11.08 crore will be allocated towards the acquisition of equipment, plant, and machinery in Palghar, Maharashtra, while ₹30 crore will be earmarked for debt repayment. As of December 2023, the company's outstanding borrowings stand at ₹59.05 crore.
Gala Precision Engineering's diversified DSS products find applications across various sectors, including renewable energy, railways, automobiles, off-highway vehicles, heavy machinery, and electrical and power equipment. Notably, the company holds a dominant position in the domestic DSS market for the renewable industry, boasting a 70 percent share, along with a 3 percent share in the global market.
In terms of clientele, Gala Precision Engineering serves numerous global Original Equipment Manufacturers (OEMs), Tier 1 suppliers, and channel partners. Its esteemed clientele includes renowned names such as John Deere India, Brembo Brake India, BUFAB India Fasteners, and Endurance Technologies, among others.
From a financial standpoint, the company witnessed a remarkable 240 percent year-on-year surge in net profit, reaching ₹22.6 crore for the fiscal year ended March FY23, driven significantly by exceptional gains.
