Gala Precision Engineering IPO: Public Issue Subscribed 93x On Final Day, GMP Soars High; Check Dates

The initial public offering (IPO) of Gala Precision Engineering has turned out to be a success, garnering strong interest from investors across the spectrum. The IPO, which opened for subscription on Monday, September 2, and concluded today, Wednesday, September 4, witnessed overwhelming participation, particularly from non-institutional investors and retail investors.

As the final day of bidding drew to a close, the IPO had been subscribed 92.97 times by 12:36 pm, according to data from the Bombay Stock Exchange (BSE). The issue saw bids for 20,67,56,732 shares against the 22,23,830 shares on offer.

The subscription data revealed that non-institutional investors led the charge with a subscription of 255.67 times. Retail investors followed closely, subscribing to their allotted portion 68 times. The Qualified Institutional Buyers (QIBs) also showed strong interest, with their portion being subscribed 13.76 times, while the employee portion was oversubscribed by 191.39 times.

The momentum for Gala Precision Engineering's IPO began building from the very first day of bidding. On the initial day, the IPO was subscribed 10.84 times, setting the tone for the days to come. By the second day, the subscription had surged to 52.21 times, with non-institutional investors subscribing to their quota 132.93 times. Retail investors subscribed 44.21 times on the second day, while QIBs saw their portion being subscribed 5.06 times. The employee quota was booked 117.89 times, indicating strong interest across the board.

Gala Precision Engineering has priced its IPO in the range of Rs 503 to Rs 529 per equity share, with a face value of Rs 10. The lot size has been set at 28 equity shares, allowing investors the option to purchase additional shares in multiples of 28. The company has reserved not more than 50% of the shares in the public issue for QIBs, not less than 15% for non-institutional investors, and not less than 35% for retail investors.

The response to the IPO has been driven by Gala Precision Engineering's strong financial performance and its position in the market. The company reported operating revenue of Rs 202.54 crore for the fiscal year 2023-2024, with a post-tax profit of Rs 22.33 crore. This solid financial foundation, coupled with the company's plans for expansion.

Before the IPO opened to the public, Gala Precision Engineering had already secured an investment of Rs 50.29 crore from anchor investors. The IPO's success is also reflected in the grey market, where shares of Gala Precision Engineering were trading at a premium.

As of today, the grey market price (GMP) for the IPO stood at a premium of Rs 230, indicating that shares were trading at a substantial markup over the issue price. Considering the upper end of the IPO price band, the estimated listing price for Gala Precision Engineering shares is Rs 759 per share, which represents a 43.48% premium over the issue price of Rs 529. This upward trend in GMP over the past ten sessions indicates that market participants are expecting a strong listing for Gala Precision Engineering.

The Gala Precision Engineering IPO consists of a fresh issue of 2.56 million shares, along with an offer for sale (OFS) of 6,16,000 shares by existing promoters and shareholders. The total issue size at the upper price band is Rs 167.93 crore, with the fresh issue accounting for Rs 134.34 crore and the OFS contributing Rs 32.58 crore.

The company has outlined several key objectives for the net proceeds from the IPO. These include the establishment of a new manufacturing facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu, for producing hex bolts and high tensile fasteners. Additionally, part of the proceeds will be used to finance capital expenditures for purchasing machinery and equipment for the company's facility in Wada, Palghar, Maharashtra. Furthermore, the company plans to use a portion of the funds to repay or prepay some of its existing debt, with the remainder allocated for general corporate purposes.