Gala Precision Engineering IPO: Date, Price, Details—Should You Apply?

Subscriptions for the Gala Precision Engineering initial public offering (IPO) open on September 2, 2024, and run until September 4, 2024. On Thursday, September 5, 2024, the allocation for the Gala Precision Engineering initial public offering is anticipated to be completed. The Gala Precision Engineering Initial Public Offering (IPO) is scheduled to go live on the BSE and NSE on Monday, September 9, 2024.

Let’s look at the Gala IPO in detail for you to decide whether you should apply for it or not. 

About Gala Precision Engineering Pvt. Ltd.

Gala Precision Engineering Limited was established in February 2009 and specialises in producing precision parts, including coil and spiral springs (CSS), disc and strip springs (DSS), and special fastening solutions (SFS). The firm provides these goods to producers of original equipment. (OEMs).

Source: Gala Precision Engineering

The company’s goods are utilised in mobility segments including automotive and railway, as well as in industries like electrical, off-highway equipment, infrastructure, and general engineering.

Also read: Initial Public Offering (IPO): Types, Benefits, and Upcoming IPOs in 2024

Gala Precision Engineering IPO details 

IPO Date	September 2 to September 4, 2024
Face Value	₹10 per share
Price Band	₹503 to ₹529 per share
Lot Size	28 Shares
Total Issue Size	3,174,416 shares(aggregating up to ₹167.93 Cr)
Fresh Issue	2,558,416 shares(aggregating up to ₹135.34 Cr)
Offer for Sale	616,000 shares of ₹10(aggregating up to ₹32.59 Cr)
Issue Type	Book Built Issue IPO
Listing At	BSE, NSE

For more information, refer to the Gala Precision Engineering Limited RHP.

Gala Precision Engineering Limited Financials

Period Ended	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets (in ₹ Cr.)	188.69	170.39	145.62
Revenue (in ₹ Cr.)	204.38	167.08	147.96
Profit After Tax (in ₹ Cr.)	22.33	24.21	6.63
Net Worth (in ₹ Cr.)	104.45	83.66	59.32
Reserves and Surplus (in ₹ Cr.)	94.67	81.13	56.79
Total Borrowing (in ₹ Cr.)	55.03	58.6	56.89

Also read: 7 Top Investing Mistakes New Investors Should Avoid in Today’s Volatile Market

Gala Precision Engineering IPO objectives

Gala Precision Engineering’s proposed IPO aims to utilise the net proceeds for several key objectives. Firstly, the company plans to set up a new manufacturing facility in Vallam-Vadagal, Tamil Nadu, to produce high-tensile fasteners and hex bolts. 

Additionally, the proceeds will fund capital expenditures for purchasing equipment, plant, and machinery at the company’s existing facility in Wada, Maharashtra. 

The IPO will also enable Gala Precision to repay or prepay certain outstanding borrowings, either in full or in part. Finally, a portion of the net proceeds has been earmarked for general corporate purposes, which may include working capital requirements, strengthening the company’s marketing capabilities, or exploring strategic acquisitions or partnerships.

Should you apply for the Gala IPO?

Gala Precision Engineering Limited, specialising in precision components and technical springs, has shown growth in both revenue and profits over the reported periods. While the company demonstrated higher net profits in FY23, it’s important to note that this was due to exceptional items related to discontinuing some plants and machinery. 

The IPO appears to be fully priced based on FY24 earnings, with a P/E ratio of 30.01. This valuation is in line with some of its listed peers, though direct comparisons may not be entirely appropriate. Given the company’s growth trajectory and position in the precision components industry, investors looking for exposure to this sector might consider applying for the IPO with a medium- to long-term investment horizon.

However, as with any investment, it’s crucial to assess your own risk tolerance and financial goals before making a decision.

Interested in the Gala IPO? Click to apply here.

Dhanush provides an efficient way to apply and offers expert analysis, which could be beneficial for those looking to invest in this new stock offering. Remember to carefully evaluate the opportunity and consider how it aligns with your personal financial objectives before committing to any investment.