Mumbai, India – Gala Precision Engineering Limited, a renowned name in the precision component manufacturing sector, has received the green light from the Securities and Exchange Board of India (SEBI) for its much-anticipated initial public offering (IPO). This development marks a significant milestone for the Mumbai-based company, known for its high-quality technical springs and specialized fastening solutions.
A Journey from Filing to Approval
Gala Precision Engineering had initially filed its IPO papers with SEBI on February 14, 2024. The regulatory nod now allows the company to proceed with its public offering, aiming to raise substantial funds to fuel its expansion and modernization plans.
Details of the IPO Structure
The IPO, with a face value of Rs 10 per equity share, comprises a fresh issue of up to 25.58 lakh equity shares and an offer for sale of up to 6.16 lakh equity shares by the Promoter Group and Individual Selling Shareholders. Additionally, there is a reservation for subscription by eligible employees, making this a comprehensive and inclusive offer.
The offer follows the book-building process, ensuring a fair allocation of shares:
- Up to 50% of the offer is earmarked for qualified institutional buyers (QIBs).
- At least 15% is allocated to non-institutional bidders.
- The remaining 35% is available for retail individual bidders.
Utilization of IPO Proceeds
The proceeds from the fresh issue are strategically planned to support Gala Precision’s growth trajectory. Specifically, the funds will be utilized as follows:
- Rs 37 crore will be directed towards establishing a new facility at Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu, for manufacturing high tensile fasteners and hex bolts.
- Rs 11.07 crore will be invested in capital expenditure for purchasing equipment, plant, and machinery at the existing facility in Wada, Palghar, Maharashtra.
- Rs 30 crore is earmarked for repaying or prepaying certain borrowings.
- The remaining funds will be used for general corporate purposes.
A Legacy of Innovation and Quality
Under the leadership of Kirit Vishanji Gala, Gala Precision has carved a niche in the precision engineering domain. The company boasts over three decades of expertise in creating customized products tailored to the evolving needs of its clientele. Notably, Gala Precision holds an impressive 15% market share in the domestic specialized fastening solutions (SFS) market for wind turbines.
Gala Precision’s product portfolio is diverse, encompassing springs technology, which includes wedge lock washers (WLW), coil and spiral springs (CSS), and special fastening solutions (SFS) such as anchor bolts, studs, and nuts. The company operates two state-of-the-art manufacturing facilities in Wada, Palghar, Maharashtra, with a new facility underway in Tamil Nadu.
Strategic Partnerships and Market Listing
PL Capital Markets Private Limited is the sole book-running lead manager for the IPO, ensuring a smooth and efficient process. Link Intime India Private Limited will serve as the registrar of the offer, overseeing the administrative aspects. The equity shares are proposed to be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), providing a broad platform for investor participation.
Looking Ahead
With SEBI’s approval, Gala Precision Engineering is poised to embark on a new phase of growth and innovation. The funds raised through the IPO will not only enhance its manufacturing capabilities but also solidify its position as a leader in the precision engineering industry. Investors and industry observers alike will be keenly watching the company’s journey as it leverages this opportunity to scale new heights.
