Gala Precision Engineering Ltd. is gearing up for its Initial Public Offering (IPO), with the book-built issue set to raise ₹167.93 crores. The IPO is a mix of fresh issue and offer for sale, with the company offering 0.26 crore new shares worth ₹135.34 crores and an additional 0.06 crore shares from existing stakeholders aggregating to ₹32.59 crores.

IPO Timeline and Key Dates

• Opening Date: September 2, 2024
• Closing Date: September 4, 2024
• Allotment Finalization: September 5, 2024
• Listing Date (Tentative): September 9, 2024

Investors looking to participate in this offering should note that the price band for the shares is set between ₹503 and ₹529 per share. Retail investors can make a minimum investment by purchasing 28 shares, requiring a minimum outlay of ₹14,812. For high net-worth individuals (HNIs), the minimum investment begins at 14 lots (392 shares), totaling ₹207,368, while for the larger investors (bNII), it’s 68 lots (1,904 shares) amounting to ₹1,007,216.

Key IPO Details:

• Total Issue Size: 3,174,416 shares aggregating up to ₹167.93 crores
• Fresh Issue: 2,558,416 shares aggregating up to ₹135.34 crores
• Offer for Sale: 616,000 shares aggregating up to ₹32.59 crores
• Listing: The shares will be listed on BSE and NSE.

The IPO is managed by PL Capital Markets Private Limited, with Link Intime India Private Ltd serving as the registrar.

IPO Reservation Quota:

• QIB (Qualified Institutional Buyers): Not more than 50.00% of the Net offer
• Retail Investors: Not less than 35.03% of the Net Issue
• NII (Non-Institutional Investors): Not less than 15.00% of the Net Issue

Anchor Investor Allocation:

Gala Precision Engineering successfully raised ₹50.29 crores from anchor investors on August 30, 2024. These investors were allocated 950,586 shares. Half of these shares are under a 30-day lock-in period until October 5, 2024, while the remaining shares are locked in for 90 days until December 4, 2024.

About Gala Precision Engineering Ltd.

Incorporated in February 2009, Gala Precision Engineering Ltd. specializes in manufacturing precision components such as disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS). The company serves a diverse range of industries, including electrical, off-highway equipment, infrastructure, general engineering, automotive, and railway sectors.

Global Reach: Gala Precision’s products are exported to countries like Germany, Denmark, China, Italy, Brazil, USA, Sweden, and Switzerland, making it a crucial supplier for original equipment manufacturers (OEMs) worldwide.

Manufacturing Footprint: The company operates two manufacturing facilities in Wada District, Palghar, Maharashtra, with plans to expand with a new facility in Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu, dedicated to high-tensile fasteners production.

Financial Snapshot

Gala Precision Engineering has demonstrated robust growth, with a 22% increase in revenue between March 31, 2023, and March 31, 2024, though profit after tax (PAT) saw a slight decline of 8% during the same period.

Key Financial Metrics (₹ in Crores):

• Revenue: ₹204.38 (2024) vs. ₹167.08 (2023)
• Profit After Tax: ₹22.33 (2024) vs. ₹24.21 (2023)
• Net Worth: ₹104.45 (2024)
• Total Borrowing: ₹55.03 (2024)

Investment Metrics:

• Return on Equity (ROE): 23.59%
• Return on Capital Employed (ROCE): 19.91%
• Debt/Equity Ratio: 0.53
• PAT Margin: 11.89%

Pre-IPO vs. Post-IPO Metrics:

• EPS: 22.09 (Pre-IPO) vs. 17.63 (Post-IPO)
• P/E Ratio: 23.95x (Pre-IPO) vs. 30.01x (Post-IPO)

Use of Proceeds

The net proceeds from the IPO will be utilized for:

1. Setting up a new manufacturing facility in Tamil Nadu for high-tensile fasteners.
2. Funding capital expenditure for equipment and machinery at the Wada, Palghar facility.
3. Repaying or prepaying certain borrowings.
4. General corporate purposes.

Conclusion

Gala Precision Engineering Ltd.'s upcoming IPO offers investors a chance to invest in a company with a strong global presence and a solid financial track record. With a focus on expanding its product portfolio and enhancing its manufacturing capabilities, the company is poised for growth in the coming years. Investors should carefully consider the IPO's details and financial metrics before making their investment decisions.