Gala Precision Engineering has filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO). The IPO will consist of 31,74,416 equity shares, including a fresh issue of 25,58,416 equity shares by the company and an offer-for-sale of 6,16,000 equity shares by existing shareholders.
The offer-for-sale will see Promoter Vishanji Harshi Gala as the primary selling shareholder, aiming to divest 3,85,200 equity shares. The remainder of the shares, totaling 2,30,800 equity shares, will be sold by other stakeholders, including Kirit Vishanji Gala (HUF), Nayna Gala, Satish Kotwani, Hemlata Dhiraj Shah, Dhiraj Nanchand Shah, Urmil Dhiraj Shah, and Rupa Sunil Mehta.
The company plans to allocate ₹37 crore from the IPO proceeds towards establishing a new facility in Sriperumbuddur, Tamil Nadu, for the production of high tensile fasteners and hex bolts. Additionally, an amount of ₹11.08 crore will be allocated towards the acquisition of equipment, plant, and machinery in Palghar, Maharashtra, while ₹30 crore will be earmarked for debt repayment.
Gala Precision Engineering is known for its precision manufacturing of technical springs such as disc & strip springs (DSS) and serves various sectors, including renewable energy, railways, automobiles, and off-highway vehicles. The company has witnessed a significant 240 percent year-on-year surge in net profit for the fiscal year ended March FY23.
The IPO filing signifies the company’s intent to embark on a strategic expansion and solidify its position in the industry. The move comes at a time when Gala Precision Engineering has a dominant share in the domestic DSS market for the renewable industry and a notable presence in the global market. With its diversified products and esteemed clientele, the company is poised for growth and success in the IPO market.
