Gala Precision Engineering IPO
Incorporated in February 2009, Gala Precision Engineering Limited is a manufacturer of precision components such as disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS). The company supplies these products to original equipment manufacturers (OEMs).
The company’s products are used in sectors such as electrical, off-highway equipment, infrastructure, and general engineering, as well as in mobility segments such as automotive and railway.
Gala Precision has two manufacturing facilities in Palghar (Maharashtra).
Gala Precision Engineering IPO Objectives
The IPO objectives for Gala Precision Engineering are as follows:
- Setting up a new facility at Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu, for manufacturing high tensile fasteners and hex bolts;
- Funding capital expenditure requirements towards the purchase of equipment, plant and machinery at Wada, Palghar, Maharashtra;
- Repayment/ prepayment, in full or part, of certain borrowings availed by the company
- General corporate purposes.
| IPO Date | September 2, 2024 to September 4, 2024 |
| Listing Date | September 9, 2024 |
| Face Value | ₹10 per share |
| Price Band | ₹503 to ₹529 per share |
| Lot Size | 28 Shares |
| Total Issue Size | 3,174,416 shares (aggregating up to ₹167.93 Cr) |
| Fresh Issue | 2,558,416 shares (aggregating up to ₹135.34 Cr) |
| Offer for Sale | 616,000 shares of ₹10 (aggregating up to ₹32.59 Cr) |
Gala Precision Engineering Limited Product Portfolio
The company is a manufacturer of precision components such as:
- Disc and Strip Springs (DSS): Tailored for industries like renewable energy, railways, and industrial applications.
- Coil and Spiral Springs (CSS): Designed for critical applications in automotive, off-highway vehicles, and other industrial sectors.
- Special Fastening Solutions (SFS): Including anchor bolts, studs, and nuts, ideal for renewable energy, railways, and heavy machinery.
Market Share: The company claims to be a major disc springs manufacturer in the domestic market, boasting a 10% market share in the Indian disc springs market. It has a significant presence in the disc and strip springs market for the renewable industry, with a 70% share in the domestic market and 3% in the global market.
Company Financials
| Period Ended | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
| Revenue | 204.38 | 167.08 | 147.96 |
| Profit After Tax | 22.33 | 24.21 | 6.63 |
Note: In ₹ Crore
Key Strengths of Gala Precision Engineering Limited
- Well-established manufacturer of precision engineering solutions with a diverse product portfolio for multiple user industries.
- Long-standing relationships of over 15 years with both Indian and global OEM and Tier 1 customers.
- Well equipped manufacturing facilities along with in-house design and other capabilities which offer scale, flexibility, and comprehensive solutions.
- It is an experienced management team supported by a large, diverse, and skilled workforce.
- Good track record from the incorporation of consistent financial growth and performance characterized by operational efficiency and high repeat business.
- The company has a global customer base of more than 175 companies and sells its products in over 25 countries, including major markets such as Germany, Denmark, China, Italy, Brazil, the United States, Sweden, and Switzerland.
Key Risks of Gala Precision Engineering Limited
- The company’s revenue is heavily reliant on a small number of major customers. A decline in their purchasing activity could significantly impact its financial performance.
- As a labour-intensive business, the company is vulnerable to disruptions caused by work stoppages, increased wage demands, or rising minimum wages. Its ability to attract and retain employees at competitive terms is crucial to its operations.
- The absence of exclusive agreements with customers and suppliers exposes the company to risks associated with losing key business relationships.
