Gala Precision Engineering IPO sees robust demand on final day with over 201x subscription

Gala Precision Engineering IPO sees robust demand on final day with 200x subscription

Gala Precision Engineering's Rs 168-crore initial public offering has attracted robust demand on the final day of bidding, i.e. September 4 as investors bought 44.79 crore equity shares, higher by 201.41 times compared to the offer size of 22.23 lakh equity shares.

The Maharashtra-based precision components maker aims to raise Rs 135.34 crore through fresh issue component, and Rs 32.59 crore via offer-for-sale. The price band for the issue is Rs 503-529 per share.

Non-institutional investors took the lead with their portion recording a massive 414.62 times subscription, followed by qualified institutional buyers who bought 232.54 times the allotted quota. Retail investors also seem to be positive on the issue, picking 91.95 times the portion set aside for them, while employees bid 258.94 times the reserved portion.

Gala Precision has already mobilised Rs 50.3 crore from 8 institutional investors including Negen Undiscovered Value Fund, NAV Capital Emerging Star Fund, Cognizant Capital Dynamic Opportunities Fund, India Emerging Giants Fund, and Finavenue Growth Fund, on August 30.

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The company is going to spend fresh issue proceeds for setting up a new facility at Vallam-Vadagal, Tamil Nadu for manufacturing high tensile fasteners and hex bolts; and purchase of equipment, plant and machinery at Palghar facility, Maharashtra. In addition, the IPO funds will be utilised for repaying debt, and general corporate purposes.

Gala manufactures disc & strip springs, coil & spiral springs, and special fastening solution, supplying to original equipment manufacturers, and Tier 1 and channel partners. Its products are used in sectors like renewable energy, electrical, off highway equipment, infrastructure and general engineering, automotive and railways.

With the offer closing, it will finalise the basis of allotment of IPO shares by September 5, while IPO shares will be credited to the demat accounts of successful investors by September 6.

The trading in Gala Precision shares will commence on the bourses effective September 9. Its IPO shares were trading at 43 percent premium over the issue price in the grey market, the market observers said.

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