Maharashtra-based Gala Precision Engineering is planning to raise funds via an initial public offering as it has filed preliminary papers with the capital markets regulator SEBI.
The 31,74,416 equity shares IPO comprises a fresh issue of 25,58,416 equity shares by the company, and an offer-for-sale of 6,16,000 equity shares by the existing shareholders, as per the filing with the SEBI on February 14.
Promoter Vishanji Harshi Gala will be the major selling shareholder in the OFS, offloading 3,85,200 equity shares, while the remaining 2,30,800 equity shares will be sold by Kirit Vishanji Gala (HUF), Nayna Gala, Satish Kotwani, Hemlata Dhiraj Shah, Dhiraj Nanchand Shah, Urmil Dhiraj Shah, and Rupa Sunil Mehta.
Promoters have 74.56 percent stake in the company and the remaining shares are held by the public including Pooja Unichem LLP.
Gala that manufactures precision component of technical springs like disc & strip springs (DSS) will spend Rs 37 crore of the issue proceeds for setting up a new facility at Sriperumbuddur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts.
Further, Rs 11.08 crore will be utilised for purchase of equipment, plant and machinery at Palghar, Maharashtra, and Rs 30 crore for repaying debts.
The company has outstanding borrowings of Rs 59.05 crore at the end of December 2023.
Its DSS products are used in several sectors including renewable energy, railways, automobiles, off highway vehicles, heavy machinery, electrical and power equipment. It has a significant presence in the DSS market for renewable industry with a 70 percent share in the domestic market and a 3 percent share in the global market.
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Gala Precision Engineering supplies products to several global original equipment manufacturers (OEM), tier 1 and channel partners across the sectors such as John Deere India, Brembo Brake India, BUFAB India Fasteners, Endurance Technologies, Enercon GmbH, EXEDY Clutch India, Hitachi Astemo Chennai, L&T Electrical & Automation Products (a unit of Schneider Electric), SAL Automotive, Schaeffler India, and Turbo Energy.
On the financials front, the net profit increased by 240 percent year-on-year to Rs 22.6 crore for the year ended March FY23, supported by exceptional gains.
Revenue from operations during the same period grew by 14 percent to Rs 165.5 crore compared to the year-ago period. In the first half of FY24, the net profit stood at Rs 10.13 crore on revenue of Rs 95.68 crore.
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PL Capital Markets is the sole merchant banker to the issue.
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