Gala Precision Engineering is tapping the primary market with an initial public offer to raise Rs 167.93 crore. The precision products manufacturer’s offer is a combination of a fresh issue and an offer-for-sale component.
Here are all the key details you need to know
1.) IPO Dates
The IPO will open for subscription on September 2, 2024 and close on September 4, 2024
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2.) Price Band
The price band for the issue has been fixed at Rs 503-Rs 529 per share
3.) Offer Details
The IPO includes 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. At the upper end of the price band, the IPO is expected to raise Rs 167.93 crore.
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4.) Objectives of the Issue
The company plans to utilize the net proceeds for multiple objectives, including setting up a new facility in Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu, for manufacturing hex bolts and high-tensile fasteners; funding capital expenditure for purchasing machinery, plant, and equipment in Wada, Palghar, Maharashtra; repaying or prepaying a portion of its existing debt; and for general corporate purposes.
5.) Lot Size
Investors can bid for a minimum of 28 equity shares and in multiples thereof. Hence, the minimum investment by retail investors would be Rs 14,084 (28 (lot size) x Rs 503 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,812.
6.) Company Profile
Founded in February 2009, Gala Precision Engineering Limited specializes in manufacturing precision components, including disc and strip springs (DSS), coil and spiral springs (CSS), and specialized fastening solutions (SFS). These products are supplied to original equipment manufacturers (OEMs). Gala’s components serve a wide range of sectors, including electrical, off-highway equipment, infrastructure, and general engineering, along with mobility segments like automotive and railway industries.
7.) Financials
For FY 2023-24, the company’s revenue from operations rose by 22.41 percent, reaching Rs 202.55 crore, up from Rs 165.47 crore in the previous fiscal year. This growth was fueled by higher sales of DSS, spurred by new customer acquisitions and rising demand from the renewable energy, railways, and industrial sectors. Additionally, increased sales of CSS were driven by higher demand from the automobile industry and the start of supplies to the railways. Profit after tax for FY 2024 stood at Rs 22.33 crore.
8.) Lead Managers
PL Capital Markets Private Limited is the book-running lead manager of the Gala Precision Engineering IPO, while Link Intime India Private Ltd is the registrar for the issue.
9.) Key Risks
a.) Gala’s business and revenue from operations are dependent on the demand for customers’ products. Any loss of, or a significant reduction in purchases by such customers due to the reduction in demand for its customer’s products could adversely affect our business.
b.) The company is involved in a patent infringement suit, and an adverse outcome in this proceeding may adversely affect Gala’s business, financial condition and growth strategy.
c.) It does not have long-term contracts or exclusive arrangements with any of its suppliers, and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials, could hurt the business and results of operations.
10.) Listing Date
Shares of Gala Precision will likely be listed on BSE and NSE with a tentative listing date fixed as Monday, September 9, 2024.
