Gala Precision Engineering Limited, a prominent name in precision components, is launching an IPO of ₹167.92 Crores from September 2 to September 4, 2024. This issue comprises a fresh issue of 2.55 lakh shares valued at ₹135.34 Crores and an Offer for Sale of 0.61 lakh shares totaling ₹32.58 Crores. The shares will be listed on the BSE and NSE with a tentative listing date of September 9, 2024.

IPO Details
The IPO shares are priced between ₹503 and ₹529 per share. Investors need to apply in multiples of 28 shares, with a minimum investment of ₹14,812 for retail investors and ₹207,368 for High-Net-Worth Individuals (HNIs), who must purchase 14 lots (392 shares). Allotment is expected to be finalized by September 5, 2024.

Lead Managers and Registrar
PL Capital Markets Private Limited is the book-running lead manager, and Link Intime India Private Limited is the registrar for the IPO.

Grey Market Premium (GMP)
The Grey Market Premium (GMP) for the Gala Precision Engineering IPO is projected to be between ₹250 and ₹270. This premium reflects the anticipated demand and speculative interest but does not guarantee actual listing performance. The GMP suggests a potential listing gain of 47% to 50%.

Live Subscription Status
As of 5:55 PM on September 4, 2024, the IPO has been subscribed 117.58 times, indicating strong market interest. For the latest subscription details, visit the Gala Precision Engineering IPO Live Subscription Status page on BSE.

IPO Allotment Status
The allotment date for the Gala Precision Engineering IPO is September 5, 2024. To check your allotment status:

Visit the IPO allotment status page on the registrar’s website.

Select Gala Precision Engineering Limited IPO from the dropdown menu.

Enter your application number, PAN, or DP Client ID.

Submit the details to view the allotment status.

Use of IPO Proceeds
The proceeds from the IPO will be used for:

₹370.00 million to set up a new facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts.

₹110.69 million for purchasing equipment, plant, and machinery at Wada, Palghar, Maharashtra.

₹454.30 million for repaying or prepaying certain borrowings.

General corporate purposes, allowing for operational flexibility.

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Company Overview and Financials
Gala Precision Engineering specializes in designing and manufacturing precision components such as High Tensile Fasteners, Disc & Strip Springs, Coil & Spiral Springs, and Wedge Lock Washers. The company serves major OEMs, Tier-1 & Channel Partners across industries like Renewable Energy, Industrial, and Mobility.

Led by Kirit Vishanji Gala, the company's Chairman and Managing Director with over three decades of experience, Gala Precision has demonstrated consistent growth. Financially, the company’s revenue increased from ₹1,367.35 million in FY22 to ₹1,767.90 million in FY24. EBITDA rose from ₹1,479.63 million in FY22 to ₹2,043.77 million in FY24, while PAT grew from ₹66.31 million in FY22 to ₹225.32 million in FY24.

For the IPO, the pre-issue EPS is ₹22.28, and the post-issue EPS is ₹17.78. The pre-issue P/E ratio is 23.74x, and the post-issue P/E ratio is 29.75x, compared to the industry P/E ratio of 31.70x. The company’s ROCE for FY24 is 19.91%, and ROE is 23.59%, suggesting the IPO is fairly priced.

IPO Valuation
The Gala Precision Engineering IPO appears to be fairly valued based on financial performance and valuation metrics. Despite a high GMP and strong subscription figures, the IPO's valuation is reasonable compared to industry standards.

Investment Recommendation
We recommend investors apply for the Gala Precision Engineering Limited IPO for potential listing gains or long-term investment. The company's solid financial performance and growth prospects support a favorable outlook, although the higher valuation warrants careful consideration.

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