Madhya Pradesh-based Gallard Steel, which manufactures traction motor components & bogie assembly components maker for railways, has attracted healthy demand for its initial public offering (IPO) from investors on November 19, the first day of bidding as the offer saw more than 5 times subscription.
The company entered capital markets to raise Rs 37.5 crore via its initial share sale of 25 lakh shares at the upper end of price band of Rs 142-150 per share. The IPO comprises of entirely fresh issue component, which remain open till November 21.
Investors picked 90.18 lakh shares on Wednesday, which is 5.04 times higher compared to offer size of 17.91 lakh shares, via 3,279 applications.
Retail and non-institutional investors took the lead, bidding 7 times and 6.59 times their allotted quotas, while the qualified institutional buyers have not participated in the offer yet.
Gallard Steel that also makes rebonded foam and steel components has already raised Rs 10.63 crore by issuing 7.09 lakh shares to four anchor investors at upper price band on November 18. SageOne, Cognizant Capital, Vikasa India, and Minerva Ventures Fund were investors in the anchor book.
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The company will spend Rs 20.7 crore of IPO proceeds for expansion of its existing manufacturing facility and construction of office building.
Further, Rs 7.2 crore will be used for repayment of its term loan taken from SIDBI & Yes Bank, and the remainder funds for general corporate purpose.
Currently, Gallard Steel operates ferrous casting business through its manufacturing facility at Pithampur, Madhya Pradesh, which has a capacity of 2,400 MT per annum. After the expansion through IPO proceeds, involving the procurement of new plant and machinery, the casting capacity will increase 6,100 MT per annum.
Additionally, its wholly owned subsidiary Sleeploop India operates a machining division at same industrial area in Madhya Pradesh, with installed capacity of machining 7,500 units per annum.
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