Strong Debut: Gala Precision Engineering IPO Sees 4X Subscription Surge on Day 1

Gala Precision Engineering Ltd, a leading player in the precision components industry, has made a remarkable entry into the market with its initial public offering (IPO) witnessing a subscription rate of over 4 times on the first day of bidding, which commenced on September 2. The overwhelming investor interest was primarily driven by non-institutional investors, who subscribed to 5.7 times their reserved portion, and retail investors, who subscribed to 5.5 times their allotted shares. Even though Qualified Institutional Buyers (QIBs) subscribed to 0.5 times their quota, the employee category saw a whopping 19.2 times subscription.

This robust demand reflects the strong confidence in Gala Precision Engineering's growth potential. The IPO, a book-built issue, aims to raise Rs 167.9 crore, comprising a fresh issuance of 26 lakh shares, worth Rs 135.3 crore, and an offer for sale (OFS) of 6 lakh shares amounting to Rs 32.6 crore. The price band is set between Rs 503 and Rs 529 per share, providing a valuable entry point for investors.

READ| Bajaj Housing Finance IPO Set to Open from September 9-11; Aims to Raise Rs 6,560 Crore

The IPO is set to close on September 4, and the finalization of allotment is scheduled for September 5, with the company expecting to list on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) by September 9. PL Capital Markets Pvt Ltd is managing the IPO, and Link Intime India Pvt Ltd is the registrar for the issue.

Before the public opening, Gala Precision Engineering successfully raised Rs 50.3 crore from anchor investors on August 30, signalling strong institutional support. Established in 2009, the company is known for manufacturing high-quality disc and strip springs (DSS), coil and spiral springs (CSS), and special fastening solutions (SFS). These components are widely utilized by Original Equipment Manufacturers (OEMs) in sectors such as automotive, electrical, infrastructure, off-highway equipment, general engineering, and railways.

Gala Precision Engineering boasts a global footprint, supplying its products to countries including Germany, Denmark, China, Italy, Brazil, the USA, Sweden, and Switzerland. For the financial year ending March 31, 2024, the company reported revenue growth of 22 per cent, reaching Rs 204 crore, despite an 8 per cent decline in profit after tax (PAT) to Rs 22 crore.

With its innovative product offerings and expansion into diverse markets, Gala Precision Engineering continues to attract substantial interest from various investor segments. The strong demand for its IPO on the opening day underlines the market's optimism about the company's future growth prospects. The anticipated listing on major stock exchanges could set the stage for further growth and expansion for this precision engineering powerhouse.

[Disclaimer: This article is intended for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research before making any investment decisions.]