Gala Precision Engineering's initial public offering (IPO) subscription commenced on Monday, September 2, and is set to conclude today, Wednesday, September 4. The initial two days of bidding saw strong participation in the Gala Precision Engineering IPO, with non-institutional investors taking the lead, followed by retail investors. On the second bidding day, Qualified Institutional Buyers (QIBs) were also oversubscribed, and there was significant demand from employees.
On Tuesday, during the second day of bidding, Gala Precision Engineering IPO received a subscription of 52.21 times, as per BSE data. Non-institutional investors subscribed to the quota 132.93 times, while retail investors secured a 44.21 times subscription. QIBs achieved a 5.06 times subscription for their portion, and the employee portion was booked 117.89 times. On the first bidding day, Gala Precision Engineering IPO subscription status was 10.84 times.
The Gala Precision Engineering IPO has a price range of ₹503 to ₹529 per equity share, with a face value of ₹10. Gala Precision Engineering, a manufacturer of specialised springs like disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS), has received an investment of ₹50.29 crores from anchor investors. The lot size for the Gala Precision Engineering IPO is 28 equity shares, with the option to purchase additional shares in multiples of 28.
Gala Precision Engineering IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
The company generated ₹202.54 crore in operating revenue during the fiscal year 2023–2024, with a post-tax profit of ₹22.33 crore.
The initial public offer of Gala Precision Engineering IPO has been subscribed 201.41 times on the last day of subscription today, as per BSE data.
The initial share sale received bids for 44,79,06,004 shares against 22,23,830 shares on offer, according to BSE data.
The portion for retail investors received 91.95 times subscription while the quota for non-institutional investors got subscribed 414.62 times. The qualified institutional buyers (QIBs) part is booked 232.54 times, and the employee portion has been subscribed 259.00 times.
The brokerage claims that by positioning itself to capitalise on these developments, the business has established a significant domestic and international market share. The firm is shifting its activities up the value chain from specialist markets to broad addressable markets, all the while focused on enhancing its core competencies in precision engineering for enhanced sustainability. In order to expand its product line and take advantage of emerging trends, the firm also intends to make use of its internal design and development resources. Those who are interested in investing can make medium- to long-term investments in the IPO.
According to the brokerage's analysis, the business has a 10% market share in the Indian disc market and a 2% market share in the worldwide DSS and WLW markets. In the future, the business plans to establish a new facility in Tamil Nadu and increase the DSS and WLW capacities at its current facilities. Furthermore, the firm has continuously grown thanks to a strategy it has pursued from its founding to transition to goods with a high TAM.
Additionally, throughout the course of FY24–27, the DSS and WLW industries are predicted to expand at a CAGR of 6.4%. The government's initiatives to promote infrastructure development and renewable energy sources, along with the rising demand for cars, will propel this rise. Therefore, this IPO is a compelling offer due to SFS expansion, a strong financial history, debt reduction, and favourable industry variables. For this reason, we rate the issue as SUBSCRIBE.
A fresh issue of 2.56 million shares and an offer for sale (OFS) of 616,000 shares by existing promoters and shareholders are both part of the initial public offering (IPO). The overall issue size at the upper price band is ₹167.93 crore, with the fresh issue priced at ₹134.34 crore and the OFS at ₹32.58 crore.
The company intends to use the net proceeds to finance the following goals: establishing a new facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu to manufacture hex bolts and high tensile fasteners; financing the capital expenditure needed to buy machinery, plant, and equipment in Wada, Palghar, Maharashtra; repaying or prepaying some of the company's borrowed funds, in full or in part; and general corporate purposes.
The registrar for the Gala Precision Engineering IPO is Link Intime India Private Ltd, and the book running lead manager is Pl Capital Markets Private Limited.
Gala Precision Engineering IPO grey market price is + ₹230. This indicates Gala Precision Engineering share price was trading at a premium of ₹230 in the grey market, according to investorgain.com
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Gala Precision Engineering shares was ₹759 apiece, which is 43.48% higher than the IPO price of ₹529.
Grey market activity over the previous ten sessions indicates that the IPO GMP is moving upward and that a good listing is anticipated. Experts from investorgain.com estimate that the lowest GMP is ₹0 and the greatest GMP is ₹268, respectively.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
