7 Reasons to Consider the Gala Precision IPO

Investing in the upcoming Gala Precision Engineering Limited IPO presents a unique opportunity for investors to participate in the growth of a leading manufacturer in the precision engineering sector.

With HDFC Sky's One-Click IPO feature, you can conveniently invest in this IPO using your existing UPI account, making the investment process seamless and efficient. In this article, we will explore the top reasons for considering investing in Gala Precision Engineering Limited and provide key details about the IPO.

7 Reasons to Invest in the Upcoming Gala Precision Engineering Limited IPO

1. Strong Market Presence

Gala Precision Engineering Limited has been a key player in the manufacturing of precision components like disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS) since its inception in 2009. The company’s established presence in the industry positions it as a reliable investment option.

2. Diverse Product Portfolio

The company supplies its products to Original Equipment Manufacturers (OEMs) across various sectors, including automotive, power, and general engineering. This diversification reduces dependency on a single industry, making Gala Precision Engineering more resilient to market fluctuations.

3. Growth in Net Profit

Gala Precision Engineering has consistently grown its net profits, a strong indicator of its operational efficiency and profitability, making it an appealing choice for investors.

4. Focus on R&D

The company’s commitment to research and development ensures continuous product quality and innovation improvement, keeping it ahead of competitors and appealing to tech-savvy investors.

5. Competitive Pricing

With a price band set at ?503 to ?529 per share, the IPO offers a competitive entry point for investors. The reasonable pricing combined with the company’s growth prospects makes this a lucrative investment.

6. IPO Reserved for Various Investors

The IPO allocation includes 50% for Qualified Institutional Buyers (QIBs), 35.03% for retail investors, and 15% for Non-Institutional Investors (NIIs), ensuring a balanced and diversified investor base.

7. Experienced Promoters

The company is led by Kirit Vishanji Gala and Smeet Kirit Gala, who collectively hold 74.56% of the shares before the IPO. Their experience and commitment to the company have been crucial in driving its growth over the years.

About Gala Precision Engineering Limited

Incorporated in February 2009, Gala Precision Engineering Limited is a leading manufacturer of precision components that cater to various industries. The company specializes in Disc and Strip Springs (DSS), Coil and Spiral Springs (CSS), and Special Fastening Solutions (SFS). Gala Precision’s products are critical components used in the automotive, power, and general engineering sectors. With a strong focus on quality and innovation, the company has established itself as a trusted partner for OEMs.

Key Details of the IPO

• IPO Date: September 2, 2024, to September 4, 2024
• Price Band: ?503 to ?529 per share
• Lot Size: 28 shares
• Total Issue Size: 3,174,416 shares (?167.93 crore)
• Fresh Issue: 2,558,416 shares (?135.34 crore)
• Offer for Sale: 616,000 shares (?32.59 crore)
• Promoter Holding Pre-Issue: 74.56%

Gala Precision Engineering IPO Reservation

• Investor Category: Shares Offered
• QIB Shares Offered: Not more than 50.00% of the Net offer
• Retail Shares Offered: Not less than 35.03% of the Net Issue
• NII (HNI) Shares Offered: Not less than 15.00% of the Net Issue

Financials of Gala Precision Engineering Limited

Gala Precision Engineering Limited has demonstrated consistent financial growth over the years. The company’s revenue streams have expanded across different sectors, reflecting its diversified business model. Detailed financial data is expected to be released closer to the listing date, offering potential investors a comprehensive view of its fiscal health.

• Assets: ?188.69 crore
• Revenue: ?204.38 crore
• Profit After Tax: ?22.33 crore
• Net Worth: ?104.45 crore
• Reserves and Surplus: ?94.67 crore
• Total Borrowing: ?55.03 crore

Objectives of the IPO

The primary objectives of the IPO are:

1. Setting up a new facility at Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts;
2. Funding capital expenditure requirements towards the purchase of equipment, plant, and machinery at Wada, Palghar, Maharashtra;
3. Repayment/prepayment, in full or part, of certain borrowings availed by the company; and
4. General corporate purposes

Conclusion

The upcoming Gala Precision Engineering Limited IPO offers a promising opportunity for investors interested in the manufacturing sector. With its strong market presence, diverse product portfolio, and experienced management, the company is well-positioned for future growth. Additionally, with the convenience of HDFC Securities IPO feature, you can easily invest using your existing UPI account, making the process hassle-free.