Gala Precision Engineering Ltd IPO

Gala Precision Engineering Limited was incorporated as `Gala Precision Engineering Private Limited' a private limited company under the Companies Act, 1956, pursuant to the certificate of incorporation issued by the RoC on February 23, 2009. The Company entered into a Business Transfer Agreement dated May 26, 2009 to transfer the business operations from Gala Precision Technology Private Limited. The name of the Company was subsequently changed to `Gala Precision Engineering Limited', upon conversion into a public company, pursuant to a board resolution dated September 5, 2023 and a shareholder resolution dated October 3, 2023, and a fresh certificate of change of name was issued on October 25, 2023 by the RoC.

The global DSS & WLW market was valued at ~US$ 891M in CY23 and is projected to grow at a CAGR of 6.1% during CY23-26. The Indian DSS & WLW market is showing the similar growth trajectory and is expected to register a CAGR of 6.6% during FY24-27, with the market value in FY24 being ~US$ 115M. Industrials sector compromising of heavy machinery like equipments used in manufacturing, infrastructure & others, contribute the maximum revenue share in the DSS & WLW market. The growth is largely accredited to the increase in steel demand to fulfil the growing urbanization & construction needs. After Industrials, mobility sector consisting of automobiles (such as four-wheelers and twowheelers) & railways is the biggest contributor to the revenue of DSS & WLW. In automobile sector, demand is fuelled by the growing consumption of passenger cars in countries like India & Brazil. The renewable energy sector comprising of wind & hydro energy is another key growing market. Here, the focus on government policies to mitigate international climate change will boost growth. The coil & spiral springs (CSS) market will witness growth due to the surge in demand of EV vehicles in India. The Indian market for CSS was valued at ~US$ 459M in FY24 and is expected to grow at a CAGR of 9.8% during FY24-27. The market growth is credited to factors like growing automobile industry & rapid urbanization. The major consumption of CSS happens in the mobility largely applied in the commercial vehicles, automobiles & railways. Coil springs are used in EVs to reduce the overall vehicle weight. Penetration of EVs in the 2-wheeler market stands at ~5% and in 4-wheeler market is ~1% as of FY23 in India. This growing penetration will largely increase the demand. After mobility, the major consumption happens in the Industrials sector. Here, the focus on Indian government to develop India's Industrials participation through schemes like PLI, Urban Infrastructure Development scheme is boosting growth.

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. Its listed competitors include Harsha Engineers International Limited, SKF India Limited, Sundram Fasteners Limited, Rolex Rings Limited, Sterling Tools Limited and Ratnaveer Precision Engineering Limited. Its 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, the company is a key link in the global supply chain for OEMs.