Gala Precision Engineering Limited is set to launch its Initial Public Offering (IPO) to raise ₹167.93 crores. The company is a leading manufacturer of precision machined components for various industries, including automotive, aerospace, and defense.
IPO Details
- Issue Type: Book-built Issue
- Issue Size: ₹167.93 crores (Fresh Issue + Offer for Sale)
- Price Band: ₹503 – ₹529 per share
- Issue Open Date: September 2, 2024
- Issue Close Date: September 4, 2024
- Expected Listing Date: September 9, 2024
- Lead Manager: Pl Capital Markets Private Limited
- Registrar: Link Intime India Private Limited
Timeline
| IPO Open Date: | September 2, 2024 |
| IPO Close Date: | September 4, 2024 |
| Basis of Allotment: | September 5, 2024 |
| Refunds: | September 6, 2024 |
| Credit to Demat Account: | September 6, 2024 |
| IPO Listing Date: | September 9, 2024 |
About Company
Gala Precision Engineering Limited is a leading manufacturer of precision machined components in India. The company caters to various industries, including automotive, aerospace, and defense.
Core Business:
- Precision Machining: Gala Precision specializes in manufacturing high-precision components with tight tolerances.
- Custom Solutions: The company offers customized solutions to meet the specific requirements of its customers.
- Value-Added Services: Gala Precision provides additional services such as assembly, testing, and surface finishing.
Market Position:
- Gala Precision has a strong presence in the Indian precision machining market.
- The company has a reputation for quality, reliability, and on-time delivery.
- Gala Precision has a diverse customer base, including leading players in the automotive, aerospace, and defense sectors.
Future Outlook:
- The Indian manufacturing sector is growing, presenting opportunities for Gala Precision to expand its operations.
- The company may explore opportunities in new industries or regions.
- Technological advancements in precision machining can provide new growth avenues.
Here are some resources to learn more about company
Objective
The primary objectives of the Gala Precision Engineering Limited IPO are:
- Raising Capital: The company aims to raise ₹167.93 crores through the IPO, which will be used for:
- Expansion: Funding the expansion of manufacturing facilities and capabilities.
- Working Capital: Meeting the day-to-day operational expenses of the business.
- General Corporate Purposes: Supporting other growth initiatives and strategic investments.
- Brand Visibility: The IPO will increase the visibility of Gala Precision Engineering among investors and the general public, enhancing its brand recognition and credibility.
- Part Exit for Existing Shareholders: The IPO includes an Offer for Sale (OFS) component, allowing existing shareholders to partially exit their investment.
By achieving these objectives, Gala Precision Engineering Limited aims to strengthen its financial position, expand its business, and enhance its market presence.
POSITIVE
- Strong Market Position: Gala Precision is a well-established player in the precision machining industry with a diverse customer base.
- Quality Products: The company has a reputation for manufacturing high-quality precision components.
- Growth Potential: The Indian manufacturing sector is growing, offering opportunities for expansion.
NEGATIVE
- Competition: The precision machining industry is competitive, with both domestic and global players.
- Economic Downturns: Fluctuations in the economy can impact demand for precision components.
- Raw Material Costs: Changes in raw material prices can affect profitability.
So, How Does Gala Precision Engineering Limited IPO Fare in Terms of Financials ?
Financial Details
Financial Review of Gala Precision Engineering Limited
| Period Ended | Assets | Revenue | PAT | Net Worth | Total Borrowing |
|---|---|---|---|---|---|
| 31 Mar 2024 | 188.69 | 204.38 | 22.33 | 104.45 | 55.03 |
| 31 Mar 2023 | 170.39 | 167.08 | 24.21 | 83.66 | 58.65 |
| 31 Mar 2022 | 145.62 | 147.96 | 6.63 | 59.32 | 6.89 |
Financial Analysis:
Key Observations:
- Revenue Growth: The company has consistently increased its revenue over the past three years, indicating strong growth and market penetration.
- Profitability: Profit after tax (PAT) has also grown steadily, suggesting improved operational efficiency and cost management.
- Asset Growth: The company has invested in assets, as evidenced by the increase in total assets over the three years.
- Debt: Total borrowing has increased, but it remains at a manageable level.
Further Analysis:
To gain a more comprehensive understanding of Gala Precision Engineering Limited’s financial performance, it would be beneficial to analyze the following:
- Profitability Ratios: Calculate gross profit margin, operating profit margin, and net profit margin to assess the company’s efficiency in converting revenue into profit.
- Efficiency Ratios: Analyze inventory turnover ratio and debtor turnover ratio to evaluate the company’s efficiency in managing inventory and collecting receivables.
- Solvency Ratios: Assess debt-to-equity ratio and interest coverage ratio to understand the company’s financial health and debt servicing capacity.
- Comparison with Peers: Benchmark Gala Precision’s financial performance against other companies in the precision machining industry.
Disclaimer: This analysis is based on limited financial data and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.
Gala Precision Engineering Limited IPO Valuation :
| KPI | Values |
|---|---|
| ROE | 23.59% |
| ROCE | 19.91% |
| Debt/Equity | 0.53 |
| RoNW | 21.38% |
| P/BV | 5.12 |
| PAT Margin (%) | 11.89 |
Gala Precision Engineering Limited IPO – SWOT Analysis
Strengths
- Established Player: Gala Precision is a well-established company in the precision machining industry.
- Diverse Customer Base: The company caters to various industries, reducing reliance on any single sector.
- Quality Products: Gala Precision has a reputation for manufacturing high-quality precision components.
- Manufacturing Expertise: The company’s expertise in precision machining ensures efficient production.
Weaknesses
- Competition: The precision machining industry is competitive, with both domestic and global players.
- Economic Downturns: Fluctuations in the economy can impact demand for precision components.
- Raw Material Costs: Changes in raw material prices can affect profitability.
Opportunities
- Expanding Market: The Indian manufacturing sector is growing, offering opportunities for Gala Precision to expand its operations.
- Technological Advancements: Adopting new technologies can improve efficiency and product quality.
- Diversification: Exploring new industries or product lines can reduce dependence on existing markets.
Threats
- Global Economic Conditions: A global economic downturn can impact demand for precision components.
- Technological Disruptions: Rapid advancements in manufacturing technology can make existing processes obsolete.
- Competition from Low-Cost Countries: Competition from countries with lower labor costs can impact pricing.
COMPETITIVE ANALYSIS: MARKET PEERS
- Murugappa Group: A diversified conglomerate with a presence in precision engineering and manufacturing.
- Kirloskar Group: Another large Indian conglomerate with interests in various industries, including engineering and manufacturing.
- Bosch Rexroth: A global leader in drive and control technology, with a focus on precision components.
- Parker Hannifin: A global manufacturer of motion and control technologies.
- Regional Players: Several regional players operate in the Indian precision machining market, offering competition at the local level.
Gala Precision Engineering Limited IPO GMP
- Grey market premium as on 04-09-2024 = Rs 230/ Share
Disclaimer:
- IPO Grey Market Premium (Gala Precision Engineering Limited IPO GMP) mention is valid for the specific date as mentioned in the header.
- We are not buying and selling IPO forms on IPO Grey Market.
- Don’t decide to subscribe to an IPO just based on the initial price, as it can change before the listing.Subscribe only considering Fundamentals of the companies.
Gala Precision Engineering Limited IPO
🔴 Live Subscription Status 🔴
04/09/2024 5:00 PM
| | NO OF SHARES OFFERED | Day 1 | Day 2 | Day 3 |
| Qualified Institutional Buyers(QIBs) | 6,33,724 | 0.86 | 5.06 | 232.54 |
| Non Institutional Investors(NIIs) | 4,75,293 | 20.71 | 132.89 | 414.62 |
| Retail Individual Investors(RIIs) | 11,09,017 | 12.14 | 44.16 | 91.95 |
| Employees | 5,796 | 38.31 | 117.86 | 258.99 |
| Total | 22,23,830 | 10.83 | 52.17 | 201.41 |
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