Gala Precision Engineering mops up over Rs 50 cr from anchor investors, IPO opens on Sept 2

Gala Precision Engineering IPO

Maharashtra-based Gala Precision Engineering has raised Rs 50.3 crore from 8 institutional investors via anchor book on August 30, a day before the issue opening.

Negen Undiscovered Value Fund is the biggest investor amongst them, buying 2.88 lakh shares worth Rs 15.28 crore.

Other seven institutional investors - NAV Capital Emerging Star Fund, Cognizant Capital Dynamic Opportunities Fund, India Emerging Giants Fund, Finavenue Growth Fund, Chhatisgarh Investments, Gagandeep Credit Capital, and Resonance Opportunities Fund - bought 94,528 equity shares each, which are worth little more than Rs 5 crore each.

"...has finalised allocation of 9,50,586 equity shares to anchor investors at a price of Rs 529 per equity share," the precision component manufacturer said in its filing to exchanges.

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Gala Precision Engineering aims to mobilise Rs 167.93 crore through its initial public offering at the upper price band. The IPO is combination of fresh issuance of 25.58 lakh equity shares worth Rs 135.34 crore, and an offer-for-sale of 6.16 lakh shares worth Rs 32.59 crore.

The price band for the public issue is Rs 503-529 per share.

PL Capital Markets is the sole book running lead manager to the issue, while Link Intime India is the registrar to the offer.

It is a precision component manufacturer of technical springs like disc & strip springs (DSS); coil & spiral springs (CSS) and special fastening solution (SFS), supplying to original equipment manufacturers, Tier 1 and channel partners.

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Its products are used in several industries such as renewable energy (wind turbine and hydro power plants), electrical, off highway equipments, infrastructure and general engineering, automotive and railways.

Gala Precision that competes with listed peers like Harsha Engineers International, SKF India, Sundram Fasteners, Rolex Rings, Sterling Tools, and Ratnaveer Precision Engineering, will spend Rs 37 crore out of the net fresh issue proceeds for setting up a new facility at Vallam-Vadagal, Tamil Nadu for manufacturing high tensile fasteners and hex bolts, and Rs 11.07 crore for purchase of equipment, plant and machinery at Palghar, Maharashtra.

Further, Rs 45.43 crore will be utilised for repaying debt and the remaining funds for general corporate purposes.

The total debt on its books stood at Rs 51.4 crore. Post issue, the debt burden on the company seems to be reducing significantly.