Gala Precision Engineering Limited 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; 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. The 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, they are a key link in the global supply chain for OEMs. Company's business primarily comprises of (i) springs technology division, under which we manufacture DSS including wedge lock washers ('WLW'), CSS and (ii) SFS in which we manufacture anchor bolts, studs and nuts. As on date of this RHP, they operate from two manufacturing facilities located in Wada, Palghar, Maharashtra. The 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, retractor springs and spring cassette assemblies, special fasteners, anchor stud, stud, kit set, belleville washers, conical springs, plate springs, serrated washers, disc washers, wedge lock washers (Gallock), spring assemblies, spring packs, bearing series. Further, they are setting up new manufacturing facility in Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu for developing various high tensile fasteners in order to add to the existing product portfolio and new products like bolts. As on 31.03.24, total installed capacity & capacity utilisation at DSS Facility, CSS Facility & SFS Facility for FY24 is respectively 22,55,17,000 & 84.84%, 2,09,41,200 & 77.88% and 4,20,000 & 69.64% respectively. Also new manufacturing facility Phase I will be operational by October 2024 and pase II by November 2025. As per financial performance, Gala Precision Engineering Limited has posted total income / net profits of Rs 147.96 Cr / Rs 6.63 Cr (FY22), Rs 167.08 Cr / 24.21 Cr (FY23) and Rs 204.38 Cr / Rs 22.33 Cr (FY24). So as per previous financials data, company has shown good sales growth. Company has an average EPS of Rs 17.63 and average RoNW of 19.26% for last three fiscals. Issue is priced at a P/BV of 5.12 as per NAV of Rs 103.3/- as on 31.03.24. If we attribute latest earnings of FY22, FY23, and FY24, then asking price is at a P/E of around 101.08, 27.68, and 30.01 respectively. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, one lead manager is associated with this IPO, and have not handled any IPO in last three fiscals including current year. PL Capital Markets Private Limited: This is 1st IPO from this BRLM in last three fiscals including current year. (As on 28.08.24) As per financials, Gala Precision Engineering Limited has shown good sales growth, RoNW is 23.3% and P/E is 101.08, 27.68, and 30.01 respectively as per FY22, FY23, and FY24 earnings. So, issue looks fully priced. Company is in business of precision component manufacturing of technical springs like disc & strip springs ('DSS') including wedge lock washers; coil & spiral springs ('CSS') and special fastening solution ('SFS'), which is a very fragmented and competitive business segment. So, we give SUBSCRIBE rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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