Upcoming IPO: Gala Precision Engineering IPO to open for subscription on September 2;price band set at ₹503-529 apiece

Gala Precision Engineering IPO price band: The Gala Precision Engineering Limited IPO price band has been fixed in the range of ₹503 to ₹529 per equity share of the face value of ₹10. The Gala Precision Engineering IPO date of subscription is scheduled for Monday, September 2, and will close on Wednesday, September 4. The allocation to anchor investors for the Gala Precision Engineering IPO is scheduled to take place on Friday, August 30.

The floor price is 50.3 times the face value of the equity shares and the cap price is 52.9 times the face value of the equity shares. The company in an advertisement on Financial Express stated that the price-to-earnings ratio based on diluted EPS for the fiscal 2024 for the company at the upper end of the price band is as high as 22.02 times and at the lower end of the price band is 20.94 times as compared to the average industry peer group P/E ratio of 39.59 times. The Gala Precision Engineering IPO lot size is 28 equity shares and in multiples of 28 equity shares thereafter.

Gala Precision Engineering IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.

Tentatively, Gala Precision Engineering IPO basis of allotment of shares will be finalised on Thursday, September 5, and the company will initiate refunds on Friday, September 6, while the shares will be credited to the demat account of allottees on the same day following refund. Gala Precision Engineering share price is likely to be listed on BSE and NSE on Monday, September 9.

According to the ILattice Report, the company is a precision component manufacturer of technical springs such as coil and spiral springs (CSS), special fastening solutions (SFS), and disc and strip springs (DSS), including wedge lock washers. It supplies OEMs, Tier 1, and channel partners. These springs are used in industries such as renewable energy, which includes wind turbines and hydro power plants, as well as various industrial sectors like electrical, off highway equipment, infrastructure, and general engineering, and mobility segments like automobiles and railways.

Harsha Engineers International Ltd (with a P/E of 44.33), SKF India Ltd (with a P/E of 48.50), Sundram Fasteners Ltd (with a P/E of 54.49), Rolex Rings Ltd (with a P/E of 40.83), Sterling Tools Ltd (with a P/E of 24.70), and Ratnaveer Precision Engineering Ltd (with a P/E of 24.69) are among the peersincluded on the list.

Between March 31, 2024, and March 31, 2023, Gala Precision Engineering Limited's profit after tax (PAT) decreased by -8% while its sales climbed by 22%.

Gala Precision Engineering IPO details

A fresh issue of 2.56 million shares and an offer for sale (OFS) of 616,000 shares by existing promoters and shareholders are both part of the initial public offering (IPO). The overall issue size at the upper price band is ₹167.93 crore, with the fresh issue priced at ₹134.34 crore and the OFS at ₹32.58 crore.

The company intends to use the net proceeds to finance the following goals: establishing a new facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu to manufacture hex bolts and high tensile fasteners; financing the capital expenditure needed to buy machinery, plant, and equipment in Wada, Palghar, Maharashtra; repaying or prepaying some of the company's borrowed funds, in full or in part; and general corporate purposes.

The registrar for the Gala Precision Engineering IPO is Link Intime India Private Ltd, and the book running lead manager is Pl Capital Markets Private Limited.

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