Gala Engineering IPO fully subscribed within an hour, GMP soars
Gala Precision Engineering's initial public offering (IPO) has been fully subscribed within an hour of its launch today. The IPO, which will close on September 4, is priced between ₹503-529 per equity share. The IPO lot size is set at 28 equity shares. Anchor investors have already committed ₹50.29 crore to the precision component manufacturer. At the time of writing, the gray market premium (GMP) for the company's shares stood at ₹240, translating to a premium of 45%.
IPO share allocation and company operations
Gala Precision Engineering has allocated up to 50% of the public issue shares for qualified institutional buyers (QIB), at least 15% for non-institutional investors (NII), and a minimum of 35% for retail investors. The company specializes in manufacturing precision components like disk and strip springs, coil and spiral springs, as well as special fastening solutions. These products are supplied to original equipment manufacturers (OEMs), Tier 1, and channel partners across various industries.
Gala Precision Engineering's diverse clientele and financial performance
Gala Precision Engineering boasts a diverse client base of over 175 active global customers. These include renewable energy companies like Vestas Wind Technology India, Enrecon GmbH, GE India Industrial, and Altra Industrial Motion India. The company also serves industrial clients such as L&T Electrical & Automation Products (a unit of Schneider Electric), Schneider Electric India, as well as automotive clients like Schaeffler India, Brembo Brake India, Hitachi Astemo, Exedy Clutch India Pvt. Ltd., Endurance Technologies Ltd.
Gala Precision Engineering's IPO receives strong response
The initial public offering of Gala Precision Engineering has been subscribed 2.12 times on the first day of subscription, according to BSE data. The IPO received bids for 47,07,556 shares against an offer of 22,23,830 shares. The retail investors' portion saw a subscription rate of 3.11 times while the quota for non-institutional investors was subscribed 2.50 times. The qualified institutional buyers (QIBs) part is yet to be booked and the employee portion has been subscribed an impressive 12.82 times.
Brokerages rate Gala Precision Engineering's IPO as 'subscribe'
Choice Equity Broking Pvt Ltd has rated the issue as "Subscribe" due to Gala Precision Engineering's dominant market position, global Tier-1 clientele, and high requested valuation. The brokerage stated that "at the higher price band, the company is demanding an EV/Sales multiple of 2.9x, which is at a discount to peer average of 4.7x." Swastika Investmart Ltd also assessed that the company has shown robust and steady revenue growth with minor fluctuations in profitability but overall positive financial performance.
Gala Precision Engineering's IPO comprises fresh issue and OFS
The IPO of Gala Precision Engineering includes a fresh issue of 2.56 million shares and an offer for sale of 616,000 shares by existing promoters and shareholders. The total issue size at the upper price band is ₹167.93 crore. The company plans to use the net proceeds to establish a new manufacturing facility in Tamil Nadu; finance capital expenditure; repay or prepay some borrowed funds; and for general corporate purposes. Gala Precision Engineering shares will list on September 9.
