The issue opened for bidding on September 2 and will be closing on September 4.
As of 11:30 am on day 2, the strongest demand was driven by the non-institutional investor (NII) category, booking the issue by 41.5 times, and the retail category booking the issue by 22.5 times. The employee reserved category subscribed to the issue by 68.2 times while the portion reserved for the qualified institutional buyers (QIBs) was subscribed by 90%.
Meanwhile, the current grey market premium (GMP) for Gala Precision Engineering is Rs 270, representing a 51% premium in the unlisted market.
Few of the promoter and promoter group entities are participating in the OFS and offloading 5.1 lakh shares. Moreover, otherindividual investors are also partially offloading their stake in the company.The proceeds from the fresh issue will be used for setting up a new facility at Vallam-Vadagal for manufacturing high tensile fasteners and hex bolts, funding capital expenditure requirements towards purchase of equipment, plant and machinery at Wada, Palghar, repayment of debt and general corporate purposes.
Gala Precision Engineering IPO price band
The issue is priced in the range of Rs 503-529 per share, where investors can bid for 28 shares in one lot and in multiples thereafter.
Gala Precision Engineering IPO review
Analysts gave a thumbs up for the IPO given the company’s dominant market position, global Tier-1 client base and attractive demanded valuation.
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“At a higher price band, GPEL is demanding an EV/Sales multiple of 2.9x, which is at a discount to peer average of 4.7x. Thus the issue is attractively priced,” said Choice Equity Broking while assigning a ‘subscribe’ rating.
“The IPO’s valuation aligns with industry benchmarks. Given current market trends and the increasing demand for precision components, GPEL is poised for a successful listing and sustained growth,” said Swastika Investmart.
Other details
Gala Precision Engineering is engaged in the manufacturing of niche precision components, which are critical to the end-user’s applications.
The company makes disc springs, strip springs, and wedge lock washers that are critical for renewable energy, industrial and mobility sectors.
Disc springs are springs and fastening solutions used for industrial applications, where mechanical devices are required to
apply force. Disc springs deliver powerful spring forces in a compact space.
Its technical springs and high-tensile fasteners are supplied to customers in countries such as Germany, Denmark, China, Italy, Brazil, USA, Sweden, Switzerland etc.
Analysts anticipate continued higher demand for its products from the end-consuming sectors like renewables, industrials and railways.
For FY24, the company’s revenue from operations rose 22% to Rs 202 crore, driven by incremental sales of DSS due to the addition of new customers and increased demand from renewable energy, railways, and industrial sectors, as well as incremental sales of CSS. Profit after tax for the same period was Rs 22.33 crore.
PL Capital Markets is the sole book-running lead manager and Link Intime India Private is the registrar to the issue.
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