Gala Precision IPO Engineering created history with the most subscribed IPO this fiscal year 2025, reaching an overwhelming subscription of more than 201.41 times on the last day of bidding, September 4. This unprecedented level of investor interest is indicative of strong investor confidence in the company and its growth prospects.
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Gala Precision IPO : Unprecedented Investor Demand
Gala Precision’s IPO witnessed an unprecedented response, with the company receiving bids for as many as 44.78 crore shares against 22.23 lakh equity shares on offer. The IPO was offered at ₹503-529 and saw active participation across all investor categories in abundance. And this is reflected in the data from the stock exchanges regarding how much in demand it was: the non-institutional investors portion was oversubscribed 414.61 times, the qualified institutional buyer portion 232.54 times, and the employee portion 258.99 times, while retail investors were not far behind with the retail portion subscribed 91.94 times.
This subscription trend once again gives evidence of strong market sentiment for Gala Precision Engineering, especially when viewed against the frenzy seen in FY25, with this IPO being the most sought-after public issue so far.
Trend of Subscription During Bidding Period
The subscription rate for Gala Precision Engineering’s IPO increased gradually over the three days of bidding. On the second day, which was Tuesday of bidding, the IPO was subscribed 52.21 times, data from BSE showed. Non-institutional investors subscribed to their allotted portion at 132.93 times during this period, while the retail portion was subscribed 44.21 times. The quota for QIBs was subscribed 5.06 times, while the Employee portion was booked at 117.89 times.
It had already reached a subscription rate of 10.84 times on the first day of bidding. The rapid growth in subscription rates from Day 1 to the final day shows the increasing demand of investors as days progressed during the window of the bidding of the IPO.
Structure of the IPO and Financials
The Gala Precision Engineering IPO had both a fresh issue and an offer for sale. In detail, the IPO was comprised of a fresh issue of 2.56 million shares and an OFS of 616,000 shares offered by the existing promoters and shareholders. The total issue size at the upper end of the price band was valued at ₹167.93 crore, with ₹134.34 crore attributed to the fresh issue and the balance ₹32.58 crore towards the OFS.
The company manufacture all types of springs-disc and strip springs (DSS), coil and spiral springs CSS, and special fastening solutions (SFS). Gala Precision Engineering has received an overwhelming response to its IPO. The price band was between ₹503 to ₹529 per equity share of face value of ₹10 each.
Allocation and Utilization of Proceeds
The IPO has been structurally designed to appeal to several groups within the investor community. As much as 50% of the public issue was allocated to QIBs, at least 15% to NIIs, and at least 35% to retail investors. This judicious balancing ensured wide participation from all classes of investors, thereby contributing to the high subscription figures.
The proceeds from the IPO would be used to part-finance some of the proposed key initiatives that are expected to drive the future growth of the company. A major portion of the funds will be utilised to set up a new manufacturing facility at Vallam-Vadagal, SIPCOT, Sriperumbudur, Tamil Nadu, for the manufacture of hex bolts and high tensile fasteners by Gala Precision. Also, a part of the equity will be used towards the financing of capital expenditure on machinery, plant, and equipment at the company’s facility located at Wada, Palghar, Maharashtra.
It will also use the subscribed money from the IPO to repay or prepay, in full or part, borrowings and reduce debt burden thereby further strengthening the balance sheet. Further, the residual funds will be utilized for general corporate purpose ensuing greater financial flexibility to pursue the strategic objectives of Gala Precision.
Market Sentiment and Role of Anchor Investors
The IPO of Gala Precision Engineering received an encouraging response from anchor investors, too, with an investment of ₹ 50.29 crores being made. Anchor investor participation has always been the strong foundation of any IPO besides a signal that the business model and growth prospects are in order.
The grey market premium for the shares of Gala Precision Engineering has been much discussed among investors. In the latest reports, the GMP was seen at a premium of ₹260 over the IPO price, according to investorgain.com. This means that shares are likely to list at around ₹789 per share, which is a potential gain of 49.15% over the upper end of the IPO price band of ₹529.
Market participants say that the GMP has been heading north and the premium has moved in ₹0-₹268 range in the last ten sessions. This upbeat grey market trend reflects strong expectations of a stellar listing and further stoked investor optimism.
Conclusion: A Landmark IPO for FY25
The record subscription rate of the Gala Precision Engineering IPO has set a new benchmark for FY25 public offerings, along with strong market reception. Its strategic plans for the utilisation of IPO proceeds, coupled with a sound business foundation, have placed it in a better position for future growth.
As the IPO progresses to listing, all eyes will be on Gala Precision Engineering in harnessing this considerable investor interest for creating further value for its shareholders. “The success of this IPO proves just how resilient and dynamic the Indian market is, especially the manufacturing and engineering sectors, and will pave the way for other companies contemplating public offerings in the near future.