Mumbai-based Gala Precision Engineering Limited, a leading precision component manufacturer of technical springs, has filed its Draft Red Herring Prospectus (DRHP) with capital market regulator Sebi to raise funds for its initial public offering (IPO).
The IPO has a face value of Rs 10 and consists of a fresh issue of equity shares up to 25.58 lakh and an offer for sale up to 6.16 lakh equity shares by the Promoter Group and Individual Selling Shareholders. The offer includes a reservation for subscription by eligible employees.
The offer for sale consists of the sale of equity shares of up to 385,200 by Vishanji Harshi Gala, up to 58,600 equity shares by Kirit Vishanji Gala (HUF), up to 50,000 equity shares by Nayna Gala, up to 40,000 equity shares by Satish Kotwani, up to 31,400 equity shares by Hemlata Dhiraj Shah, up to 28,000 equity shares by Dhiraj Nanchand Shah, up to 12,800 equity shares by Urmil Dhiraj Shah, and up to 10,000 equity shares by Rupa Sunil Mehta.
The Offer is being made through the book-building process, wherein not more than 50% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not less than 15% of the offer shall be available for allocation to non-institutional bidders, and not less than 35% of the offer shall be available for allocation to retail individual bidders.
The proceeds from the fresh issue, to the extent of Rs 37 crore for setting up a new facility at Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts; Rs 11.07 crore for funding capital expenditure requirements towards the purchase of equipment, plant and machinery at Wada, Palghar, Maharashtra; Rs 30 crore for repayment/ prepayment, in full or part, of certain borrowings availed by the Company; and General Corporate Purposes.
Led by Kirit Vishanji Gala, Gala Precision is a technology-driven company with a strong focus on quality, design tool development, and application engineering. It has more than 3 decades of experience in developing customized products to meet the evolving needs of its customers and commands an approximation of 15% market share in the domestic SFS market for wind turbines.
Gala Precision's business primarily comprises of springs technology division, which manufactures DSS including wedge lock washers ("WLW"), coil & spiral springs ("CSS") and special fastening solution ("SFS") which manufactures anchor bolts, studs, and nuts.
The springs manufactured by the company is supplied to original equipment manufacturers ("OEMs"), Tier 1 and channel partners and it is used in sectors like renewable energy including wind turbine and hydropower plants, various industrial sectors such as electrical, off-highway equipment, infrastructure and general engineering, mobility segments such as automotive and railways, according to a 1Lattice Report, mentioned in the DRHP.
Gala Precision customers include global OEMs, tier 1 and channel partners across the sectors such as John Deere India Private Limited, Faiveley Transport Rail Technologies India Private Limited (a Wabtec Company), Brembo Brake India Private Limited, BUFAB India Fasteners Private Limited, Altra Industrial Motion India Private Limited, Endurance Technologies Limited, Enercon GmbH, EXEDY Clutch India Private Limited, Hitachi Astemo Chennai Private Limited, L&T Electrical & Automation Products (a unit of Schneider Electric Private Limited), LPS Bossard Private Limited, MSL Driveline Systems Limited, SAL Automotive Limited, Schaeffler India Limited, Turbo Energy Private Limited, Vestas Wind Technology India Private Limited, Wuerth Industrial Services India Private Limited, etc.
The Company has a global clientele exceeding 175 customers, and exports to over 25 countries, encompassing major markets such as Germany, Denmark, China, Italy, Brazil, USA, Sweden, Switzerland.
Gala Precision competes with Cooper & Turner Limited, Rose Holm A/S, August Friedberg GmbH in the global SFS market and with Randack Fasteners India Private Limited, Sundram Fasteners Limited and Hiten Fasteners Private Limited in the Indian SFS market.
The Company operates its business from its two manufacturing facilities located in Wada, Palghar, Maharashtra. Further, it is also setting up a new manufacturing facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for developing various high-tensile fasteners to add to its existing product portfolio and new products.
For fiscal 2022-23, the company's revenue from operations increased by 13.90% to Rs 165.46 crore against Rs 145.28 crore for fiscal 2021-22. Profit after tax increased 265.13% to Rs 24.21 crore in fiscal 2023 from Rs 6.63 crore in fiscal 2022.
For the six months ended September 30, 2023, revenue from operations stood at Rs 95.68 crore, and profit after tax stood at Rs 9.60 crore.
The global fasteners market size stands at ~US$ 97 bn (Rs 8.05 trillion) growing at a ~6.7% CAGR between calendar year 2023 - 2026 in which global wind turbine OEM market is valued at ~US$ 75 billion (Rs 6.22 trillion) in calendar year 2023 which is growing at a CAGR of ~8% between calendar year 2023 - 2026.
PL Capital Markets Private Limited is the sole book-running lead manager for the IPO, and Link Intime India Private Limited is the registrar of the offer. The equity shares are proposed to be listed on the BSE and NSE. |
