Gala Precision Engineering Limited IPO Analysis
Main Points
IPO Opening
Gala Precision Engineering Limited IPO is open for subscription from today for the next two days.
Allotment decisions will be made on the 5th of September, with potential refunds or share allocations on the 6th.
Grey Market Premium
2nd of september Current GMP is around ₹270.
Expected profit for retail investors upon allotment is approximately ₹5,700, while HNI category can expect around ₹80,000.
IPO Opning Date 2/4 of September
Allotment Date – 5th of September
Refund/Shares Credit – 6th of september
Listing Date – 9th of september
Retail lot size – 1 lot, 28 shares = ₹14812
HNI Small Category – 14 lot, 392 shares = ₹207368
HNI Big Category – 68 lot, 1904 shares = ₹1007217
Company Overview
Incorporated in 2009, specializes in precision components.
IPO price range is between ₹503 and ₹529.
Total IPO size is ₹167 crores, with a fresh issue of ₹135 crores.
Subscription Expectations
Anticipated high subscription levels due to the small size of the IPO.
Multiple applications may increase chances of allotment.
Anchor Investor Insights
Limited mutual funds participating; notable names include NAV Capital and Cognizant Capital.
Financial Performance
Assets increased from ₹145.62 crores to ₹188.69 crores over the past two years.
Revenue growth projected at 22% for 2023-24.
Profit after tax showed a decline of -8%, but overall financial stability is positive.
Total borrowing – ₹55.03 crores
Debt/Equity ratio – 0.53
Return on equity [ ROE ] 23.59%
Return on Capital Employed (ROCE) 19.91%
P/E retio – 30.01
EPS[RS] – 17.63
Valuation Comparisons
PE ratio of the IPO is 30, compared to peers like Harsha Engineering (44), SKF (48), and others.
Positioned well in the market despite the slight dip in profits.
Objectives of the Issue
Funds will be used for setting up new facilities, repaying debts, and general corporate purposes.
Important Details
IPO lot size for retail category: 28 shares (approx. ₹14,812).
Anticipated listing date is the 9th of September.
Market sentiment remains positive with Nifty showing strength above key moving averages.
Conclusion
The Precision Engineering Limited IPO presents a promising opportunity with a favorable grey market premium and solid financial fundamentals. While high subscription rates are expected, potential investors should be mindful of the competitive nature of allotment. The overall market remains positive, with key levels to monitor for future trends. The upcoming days will be critical for determining market direction, and traders should remain vigilant of both upward and downward movements.
