Gala Precision Engineering IPO day 2: GMP, subscription status to review. Buy or not?

Gala Precision Engineering IPO: The initial public offering (IPO) of Gala Precision Engineering Limited hit the Indian primary market on 2nd September 2024 and will remain open until 4th September 2024. The company has fixed the Gala Precision Engineering IPO price band at ₹503 to ₹529 per equity share. The book build issue aims to raise ₹167.93 crore, a mix of fresh shares and offer for sale (OFS). Looking at the Gala Precision Engineering IPO subscription status after day one of bidding, the public offer has received a strong response from the primary market investors.

Gala Precision Engineering IPO GMP today

Meanwhile, the grey market is also dropping strong buzz regarding the Gala Precision Engineering IPO. According to stock market observers, Gala Precision Engineering Limited shares are available at a premium of ₹270 in the grey market today. This means Gala Precision Engineering IPO GMP (grey market premium) today is ₹270. So, after day one of bidding, the grey market is signalling a listing gain of around 51 per cent for Gala Precision Engineering IPO investors.

Gala Precision Engineering IPO subscription status

By 3:00 PM on day 2 of bidding, the public issue had been subscribed 40.77 times, the retail portion of the initial offer had been booked 37.09 times, the NII segment of the initial offer had been filled 96.94 times, and the QIB portion had been subscribed 4.59 times.

Gala Precision Engineering IPO review

BP Equities has given the book build issue a 'subscribe' tag, saying, "On the upper price band, the issue is valued at a P/E of 24.3x based on FY24 earnings, which we feel is fairly valued compared to its listed peers. Therefore, we recommend a SUBSCRIBE rating to the issue from a medium to long-term perspective."

Choice Broking has also assigned a 'buy' tag to the public issue, saying, “The company reported positive operating cash flows during the period, which increased by 1.9% CAGR. Average operating cash flow stood at Rs. 14.5cr. Total financial liabilities reported a modest decline of 0.7% CAGR. However, with better profitability, the debt-to-equity ratio improved to 0.6x in FY24, compared to 1.2x in FY21. Pre-issue average RoIC and RoE stood at 13.5% and 14.1%, respectively, during FY21-24.”

"With continued positive traction from the end-consuming sector, we forecast a 23.3% CAGR growth in the top-line over FY24-26E to Rs. 307.7cr. EBITDA margin is likely to be sustained around FY24 levels; however, with lower finance costs and the absence of exceptional items, adjusted PAT is estimated to increase by 22.8% CAGR to Rs. 37.2cr in FY26E. Post-issue, RoIC and RoE are estimated to be at 10.9% and 12.1%, respectively, in FY26E, compared to 10.7% and 10.3% in FY24," Choice Broking report says.

Other brokerages, such as Canara Bank Securities, Deven Choksey, Reliance Securities, Swastika Investmart, Master Capital, etc., have also assigned a 'subscribe' tag to the public issue.

Gala Precision Engineering IPO details

The most likely Gala Precision Engineering IPO allotment date is 5th September 2024 and Gala Precision Engineering IPO listing date is 9th September 2024.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.