About the Company:
Gala Precision Engineering Ltd is a precision component manufacturer of technical springs like disc & strip springs (“DSS”) including wedge lock washers; coil & spiral springs (“CSS”) and special fastening solution (“SFS”) supplying to original equipment manufacturers (“OEMs”), Tier 1 and channel partners.
Company’s Products are used in sectors like renewable energy including wind turbine and hydro power plants, various industrial sectors such as electrical, off highway equipments, infrastructure and general
engineering, mobility segments such as automotive and railways.
Company’s technical springs and high tensile fasteners have been supplied to customers in countries such as Germany, Denmark, China, Italy, Brazil, USA, Sweden, Switzerland etc. Accordingly, we are a key
link in the global supply chain for OEMs.
Company’s Business Operation:
Company is engaged in the manufacturing of precision component for technical springs and high tensile fasteners supplying to OEMs, in sectors like renewable energy (Wind turbine & hydro power plants), in Industrial sector (electrical, off highway equipment, infrastructure and general engineering), in Mobility (automotive & railways) in India and globally.
Company’s business primarily comprises of Springs technology, under which we manufacture (i) DSS including wedge lock washer and (ii) CSS; and SFS in which we manufacture studs, anchor bolts and nuts.
Company’s DSS (Disc & Strip Springs) Products:
- Company’s DSS products find applications in renewable energy, railways, automobiles, off highway vehicles, heavy machinery, electrical and power equipments.
- Company is a major disc springs manufacturer in domestic market and have ~10% market share in the Indian disc springs market and have a significant presence in the DSS market for renewable industry with ~70% share in the domestic market and ~3% share in the global market.
- Company’s disc springs confirm to German DIN 2093 standards, bearing series, and customized specifications featuring variety of raw materials and surface coating options. We manufacture strip springs customised for high fatigue applications.
- Company is mainly competing with Muhr und Bender KG, Schnorr GmbH, Christian Bauer GmbH + Co. KG in the global disc springs market and with International Industrial Springs in disc springs in India.
Company’s CSS (Coil & Spiral Springs) Products:
- CSS products are used in commercial vehicles, passenger vehicles, railways and industrial infrastructure. Company has positioned itself as a key import substitution for European springs suppliers and multinationals looking at PLI Schemes and other incentives offered by the Government.
- Company has also entered in a new related product category called retractor springs. These springs are a critical component for safety of the passenger.
- Company is mainly competing with Stumpp Schuele & Somappa Springs Private Limited, NHK Springs India Limited, and Muhr und Bender KG in the CSS market
Company’s SFS (Special Fastening Solution):
- Under SFS, Company manufacture make to order fasteners in the form of studs, anchor bolts and nuts which has end use applications in renewable energy, railways, off-highway vehicles, electrical and heavy machinery industries.
- Company is mainly competing with Cooper & Turner Ltd, Rose Holm A/S, August Friedberg GmbH in the global SFS market and with Randack Fasteners India Pvt Ltd, Sundram Fasteners Ltd and Hiten Fasteners Pvt Ltd in the Indian SFS market.
Company’s Revenue from operations across offerings:
Company’s Manufacturing Facilities:
Company operates from two manufacturing facilities located in Wada, Palghar, Maharashtra.
Company’s manufacturing facilities at Wada, Palghar, Maharashtra are certified with international standards such as IATF 16949 for manufacturing of disc springs, spring band clamp, stamped components, coil springs and spiral springs and ISO 9001:2015 certification for manufacturing and supply of disc springs, brush springs, spiral springs etc.
Further, Company is setting up new manufacturing facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for developing various high tensile fasteners in order to add to our existing product portfolio and new products like bolts.
Current Annual Production Capacity:
As of March 31, 2024, Company has a annual production capacity of 246.46 million units of springs and washers and 0.42 million fasteners for customers in the renewable energy including wind turbine and hydro power plants, in various industrial sectors such as electrical, off highway equipments, infrastructure and general engineering, in mobility segments such as automotive and railways, allowing us to meet changing customer requirements.
Company’s Customers:
With a global clientele exceeding 175 customers, we export to over 25 countries, encompassing major markets such as Germany, Denmark, China, Italy, Brazil, USA, Sweden, Switzerland, contributing 37.53% to total sales as of March 31, 2024.
Further, company is adding new customers for springs and fasteners in high potential markets such as Europe and USA.
Company’s Revenue from India and Exports:
Management Team:
- Mr. Kirit Vishanji Gala (Designation: Chairman and Managing Director)
- Mr. Balkishan Jalan (Designation: Whole time Director, Executive Director)
Objectives of the Issue:
Offer For Sale: (Rs.32.5 cr)
- Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will be entitled to their respective portion of proceeds of the Offer for Sale.
Fresh Issue: (Rs.135.34 cr)
- Setting up a new facility at Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts.
- Funding capital expenditure requirements towards purchase of equipment, plant and machinery at Wada, Palghar, Maharashtra.
- Repayment/ prepayment, in full or part, of certain borrowings availed by our Company.
- General corporate purposes.
Fund Utilization:
| Particulars | Amount (Rs. in Crores) |
|---|---|
| Setting up a new facility at Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for manufacturing high tensile fasteners and hex bolts |
37 cr |
| Funding capital expenditure requirements towards purchase of equipment, plant and machinery at Wada, Palghar, Maharashtra | 11.0 cr |
| Repayment/ prepayment, in full or part, of certain borrowings availed by our Company |
45.4 cr |
Positives for the Company:
Well established manufacturer of precision engineering components with diversified product portfolio and diverse market.
- Company has experience in designing, manufacturing and application engineering of high-performance standardised and customised disc springs and strip springs.
- Company’s precision components and high tensile fasteners are used in sectors like renewable energy (including wind turbine and hydro plants), in various industrial sector such as electrical, off highway equipment, infrastructure and general engineering, in mobility segments such as automotive and railways.
- Company’s disc springs are of high quality meeting German DIN 2093 standards. We cooperate with global research institutes in Germany and India for new product testing and new process validations.
Long-standing customer relationships with both Indian and global OEM and Tier 1 players.
- Over three decades of operations, Company has established long standing relationships with our customers. Company’s diverse product portfolio helps cater to a broad range of customers and we have served over 175 customers in 25 countries.
- Company has long-standing relationships with OEMs, Tier 1 and channel partners customers ranging from 4 years to more than 15 years.
Strong Focus on Renewable Energy Sectors.
- Company is a precision component manufacturer of technical springs and high tensile fasteners supplying to original equipment manufacturers (“OEMs”), Tier 1 and channel partners.
- Company intends to continue to enhance our capabilities across the focus industries renewable energy, industrial and mobility by continuing to strengthen our core capabilities in precision engineering for sustainability.
- Majority of company’s revenue from sale of wedge lock washers and high tensile fasteners are from renewable energy sectors. We are supplying products in the domestic market and to the global OEMs in Europe and USA.
Moving up the value chain from niche markets to large addressable markets.
- Company’s operations were commenced in the year 1989 by manufacturing disc and strip springs and have since diversified to include coil and spiral springs in 2015 and special fastening solution in 2018.
- Currently company is a precision component manufacturer of technical springs and high tensile fasteners supplying to OEMs, Tier 1 and channel partners. We believe our experience and manufacturing capabilities will help us to address customers from niche markets to large addressable markets.
Financials of the Company:
| (in Crores) | FY 22 | FY 23 | FY 24 |
|---|---|---|---|
| Revenue | 147.9 | 167.0 | 204.3 |
| Net Profit | 6.6 | 24.2 | 22.3 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | RoNW | NAV |
|---|---|---|---|---|---|
| Gala Precision Engineering Ltd | 10 | 21.77 | 24.30 | 21.38% | 103.30 |
| Sundram Fasteners Ltd | 1 | 24.83 | 54.49 | 15.37% | 162.81 |
| Sterling Tools Ltd | 2 | 15.35 | 24.70 | 12.38 | 124.11 |
| Ratnaveer Precision Engineering Ltd | 10 | 7.61 | 24.69 | 12.32% | 51.78 |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 2nd September 2024 |
| Issue Closes on | 4th September 2024 |
| Issue Price | Rs.503 – 529 |
| Face Value | Rs.10 |
| Retail Category Allocation | 35 % |
| Minimum Lot | 28 Shares |
| Minimum Investment | Rs.14,812 |
| Issue Constitutes | 25.05 % |
| Issue Size | Rs.167.9 cr ($ 20 million ) |
| Market Cap | Rs.670 cr ($ 80 million ) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 25,58,416 (Rs. 135.34 cr) |
| Equity Shares Offered (OFS) | 6,16,000 (Rs.32.5 cr) |
| Total Equity Shares Offered (Fresh + OFS) | 31,74,416 (Rs.167.9 cr) |
| Equity Shares Prior to the Issue | 1,01,11,584 |
| Equity Shares after the Issue | 1,26,70,000 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 21.77 | 24.30 | 21.38% | 103.30 |
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| Should You Subscribe or Not ? (Markets Guruji’s View) |
|---|
| Gala Precision Engineering Ltd is a leading manufacturer of precision components, specializing in technical springs such as disc and strip springs (DSS), including wedge lock washers, coil and spiral springs (CSS), and special fastening solutions (SFS). The company serves original equipment manufacturers (OEMs), Tier 1 suppliers, and channel partners across various sectors, including renewable energy, industrial applications, and mobility segments like automotive and railways.
Gala’s products are critical in industries such as wind turbines, hydro power plants, electrical systems, off-highway equipment, infrastructure, and general engineering. The company’s high-quality technical springs and high-tensile fasteners are supplied to a global clientele, including customers in Germany, Denmark, China, Italy, Brazil, the USA, Sweden, and Switzerland. As a vital link in the global supply chain for OEMs, Gala Precision Engineering has established itself as a well-respected manufacturer with a diversified product portfolio and market reach. With long-standing relationships with both Indian and international OEMs and Tier 1 players, and a strong focus on the renewable energy sector, Gala Precision Engineering Ltd offers a compelling investment opportunity. Investors should consider applying aggressively in this IPO. |
Important Dates:
| Finalization of Basis of Allotment | on or Before 6th September 2024 |
| Initiation of Refunds | on or Before 6th September 2024 |
| Credit of Equity Shares: | on or Before 6th September 2024 |
| Listing Date: | on or Before 9th September 2024 |
| Company Contact Info: |
|---|
| Gala Precision Engineering Ltd A-801, 8th Floor, Thane One DIL Complex, Ghodbunder Road Majiwade, Thane (West), Maharashtra, India, 400610 Tel: +91 22-6930 9224 Email: investor.relations@galagroup.com Website: www.galagroup.com |
| Registrar to the Issue: |
|---|
| Link Intime India Private Limited C-101, 1st Floor, 247 Park, L.B.S. Marg Vikhroli (West), Mumbai 400 083, Maharashtra Telephone: +91 22 4918 6200 E-mail: galaprecision.ipo@linkintime.co.in Website: www.linkintime.co.in |
