Gala Precision Engineering IPO: Gala Precision Engineering Limited has raised ₹50.29 crore from anchor investors ahead of its IPO subscription opening for bidding. The precision components manufacturer's initial public offering (IPO) is all set to hit the D-Street for its three-day subscription on Monday, September 2, and will close on Wednesday, September 4.
The company informed the bourses that it allocated 9,50,586 equity shares at Rs. 529 per share on Friday, August 30, to anchor investors. Foreign and domestic Institutions that participated in the anchor round were NAV Capital Emerging Star Fund, Negen Undiscovered Value Fund, Cognizant Capital Dynamic Opportunities Fund, India Emerging Giants Fund, Finavenue Capital Trust, Chhatisgarh Investments, Gagandeep Credit, Resonance Opportunities Fund.
The IPO consists of a fresh issue of up to 25,58,416 equity shares and an offer for sale (OFS) of up to 6,16,000 equity shares by the promoter group and individual selling shareholders. The price band for the offer has been determined at ₹503 – ₹529 per equity share.
The IPO will fetch ₹167.93 crore at the upper end of the price band. Investors can bid for at least 28 equity shares and in multiples of 28 equity shares thereafter. The floor price is 50.3 times the face value of the equity shares, and the cap price is 52.9 times the face value of the equity shares.
Gala Precision Engineering IPO has reserved not more than 50 per cent of the shares in the public issue for qualified institutional buyers (QIB), not less than 15 per cent for non-institutional Institutional Investors (NII), and not less than 35 per cent of the offer is reserved for retail investors.
Tentatively, Gala Precision Engineering's IPO basis of allotment of shares will be finalised on Thursday, September 5. The company will initiate refunds on Friday, September 6, and the shares will be credited to the demat account of allottees on the same day following the refund. Gala Precision Engineering's share price will likely be listed on BSE and NSE on Monday, September 9.
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 manufactures precision components such as disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS). The company supplies these products to original equipment manufacturers (OEMs).
The company's products are used in sectors such as electrical, off-highway equipment, infrastructure, and general engineering, as well as in mobility segments such as automotive and railway.
The company has supplied its technical springs and high-tensile fasteners to customers in several countries, including Germany, Denmark, China, Italy, Brazil, the USA, Sweden, and Switzerland, making it a crucial link in the global supply chain for OEMs. The company's business primarily comprises two divisions:
(i) Springs Technology Division manufactures DSS, including Wedge Lock Washers (WLW) and CSS,
(ii) SFS produces anchor bolts, studs, and nuts.
The company has two manufacturing facilities in Wada District, Palghar, Maharashtra, with capabilities to design, develop, and manufacture a diverse product portfolio. A new manufacturing facility is being set up in Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu, focusing on developing high-tensile fasteners to expand the product portfolio with new products like bolts.
Harsha Engineers International Ltd (with a P/E of 44.33), SKF India Ltd (with a P/E of 48.50), Sundram Fasteners Ltd (with a P/E of 54.49), Rolex Rings Ltd (with a P/E of 40.83), Sterling Tools Ltd (with a P/E of 24.70), and Ratnaveer Precision Engineering Ltd (with a P/E of 24.69) are among the peers included on the list.
Between March 31, 2024, and March 31, 2023, Gala Precision Engineering profit after tax decreased by eight per cent while its sales climbed by 22 per cent.
