Gala Precis. Eng

The Company is a well-established manufacturer of precision engineering solutions with diverse product portfolio for multiple user industries.

The Company has long-standing relationships of over 15 years with both Indian and global OEM and Tier 1 customers.

The Company has well equipped manufacturing facilities along with in-house design and other capabilities which offer scale, flexibility, and comprehensive solutions.

The Company has an experienced management team supported by large, diverse, and skilled work force.

The Company has a track record from incorporation of consistent financial growth and performance characterized by operational efficiency and high repeat business.

The Company is certified as a great workplace in the category of "Mid-size organisations" by the Great Place to Work Institute, India. The certificate is valid from November 2023 to November 2024.

The loss of any of its key customers or significant reduction in the company productions and sales of, or demand for its products from the company significant customers may adversely affect its business, results of operations and financial condition.

Its Business and revenue from operations of the Company is dependent on demand of customer`s products. Any loss of, or a significant reduction in purchases by such customers due to the reduction in demand of its customers products could adversely affect the company`s business.

The company does not have any Exclusivity Arrangements with the customers and with the suppliers.

The Company is involved in a patent infringement suit, and an adverse outcome in this proceeding may adversely affect its business, financial condition and growth strategy.

Its revenue is dependent on the springs technology segment of the company`s business. Any downturn in the spring technology segment can adversely impact its business, results of operations, cash flow and financial condition of the Company.

The company does not have long term contracts or exclusive arrangements with any of its suppliers, and a significant increase in the cost of, or a shortfall in the availability, or deterioration in the quality, of such input materials could have an adverse effect on its business and results of operations.

Its business is dependent on the performance of the application industries with a large portion of revenue being derived from a select few of application industries. Any downturn in the application industries can adversely impact the company`s business, results of operations, cash flow and financial condition of the Company.

The Company is involved in certain legal proceedings, and an adverse outcome in any such proceedings may adversely affect its business, financial condition and growth strategy.

The company has entered into transactions with related parties. These or any future related party transactions may potentially involve conflicts of interest and there can be no assurance that the company could not have achieved better terms, had such arrangements been entered into with unrelated parties.

The Company`s operations are subject to varied business risks and our Company`s insurance cover may prove inadequate to cover the economic losses of the Company.

Certain of its immovable properties, including the company registered and corporate office, are leased. If the company is unable to renew existing leases or relocate its operations on commercially reasonable terms, there may be an adverse effect on its business, financial condition and operations.

The company is dependent on third party transportation for the delivery of raw materials and finished products and any disruption in their operations or a decrease in the quality of their services could adversely affect its business and results of operations.

Its business is manpower intensive. The company`s business may be adversely affected by work stoppages, increased wage demands by its employees, or increase in minimum wages across various states, and if the company is unable to engage new employees at commercially attractive terms.

The company intend to utilise the Net Proceeds for funding its capital expenditure requirements and the company is yet to place orders for some of its capital expenditure requirements. There is no assurance that the company would be able to source such capital expenditure requirements in a timely manner or at commercially acceptable prices.

The Company has a high working capital requirement and if the Company is unable to raise sufficient working capital the operations of the Company will be adversely affected.

Its Promoters have provided personal and corporate guarantees for certain borrowings obtained by the Company and any failures or default by the Company to repay such loans could trigger repayment obligations on its Promoters which may impact their ability to effectively service their obligations and thereby, adversely impact its business and operations.

Its manufacturing facilities are dependent on adequate and uninterrupted supplies of electricity, water and fuel; shortage or disruption in electricity or fuel supplies may lead to disruption in operations, higher operating cost and consequent decline in operating margins.

The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares, market capitalization and price to earnings ratio based on the Offer Price of the Equity Shares, may not be indicative of the market price of the Company on listing or thereafter.

Failures to obtain or renew approvals, licenses, registrations and permits to operate its business in a timely manner, or at all, may adversely affect its business, financial condition, cash flows and results of operations.

The company export its products to various countries including, Germany, Switzerland, Finland, Italy, Denmark, USA, China, Brazil. Any adverse events affecting these countries including any exchange rate fluctuations, depreciation in the India Rupee and compliance with a wide range of regulatory requirement and foreign laws could have an adverse impact on its business, financial condition and results from operations.

The company may face difficulties in executing its strategies including the company expansion plans.

The company has incurred significant capital expenditures in the past and there can be no assurance that its past or planned capital expenditures will result in growth and/or additional profitability for the Company.

The company failures to identify and understand evolving industry trends and preferences to develop new products to meet its customers` demands or the company limitation including on account of knowledge of new segments into which the company is expanding may adversely affect its business.

The company depends on its senior management, Key Managerial Personnel, persons with technical expertise and other permanent employees for its business and future growth. If the company is unable to attract or retain key executives, Key Managerial Personnel or permanent employees, its operations may be adversely affected.

The company engage in foreign currency transactions, which expose it to adverse fluctuations in foreign exchange rates. Fluctuations in the exchange rate between the Rupee and other currencies may adversely affect its operating results.

The company relies on the continued operations of its manufacturing facilities and any slowdown, shutdown or disruption in its manufacturing facilities may be caused by natural and other disasters causing unforeseen damages which may lead to disruptions in its business and operations could have an adverse effect on the company`s business, results of operations, financial condition and cash flows.

There have been certain instances of delays in the payment of ESIC, PF, LWF and other statutory dues in the past by the issuer Company. Its may be subject to regulatory actions and penalties for any such delays.

The company faces competition from both domestic as well as international players and its inability to compete effectively may have a material adverse impact on the company`s business and results of operations.

Its contingent liabilities could adversely affect the company financial condition if they materialise.

As a part of its Objects of the Offer, the company intend to set up a new manufacturing facility at Vallam-Vadagal, SIPCOT, Sriperumbuddur, Tamil Nadu. Presently, its utilisation from the company SFS division is lower than its DSS and CSS divisions, and the company cannot assure you that after setting up its new facility the company will be able to improve the company capacity utilization and improve its revenue of operations, cash flows and profits from the company`s SFS division.

Any delays in the schedule of implementation of its proposed objects could have an adverse impact on the company`s business, financial condition and results of operations.

Majority of the Directors on its board does not possess experience of being on the board of a listed company.

If the company is unable to accurately forecast demand for its products and plan production schedules in advance, its business, cash flows, financial condition, results of operations, and prospects may be adversely affected.

Any shortfall in the supply of its raw materials or an increase in the company raw material costs, or other input costs for any of its segments, may adversely affect the pricing and supply of its products and have an adverse effect on the company`s business, results of operations and financial condition.

The company extend significant credit terms to its customers and are subject to counterparty credit risk. As of March 31, 2024, the Company has high level of outstanding receivables and approx. 41.85% are pending beyond normal period. Any deterioration in such customers` financial position and their ability to pay or its inability to extend credit in line with market practice may adversely impact its profitability.

its may be subject to liquidity risks, which may adversely impact its cash flows, financial condition and results of operations.

The company may not be able to improve its profit margins in the future.

Information relating to the installed capacity, actual production and capacity utilization of its manufacturing facilities included in this Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.

Changes in technology may render its current technologies obsolete or requires the company to make substantial capital investments. Further, the company failures to keep its technical knowledge confidential could erode the company competitive advantage.

Any failures to protect its intellectual property rights could adversely affect the company competitive position, business, financial condition and results of operation.

Failures or disruption of the company IT systems may adversely affect its business, financial condition, results of operations and prospects.

Compliance with, and changes in, safety, health and environmental laws and various labour, workplace and related laws and regulations including terms of approvals granted to it, may increase the company compliance costs and as such adversely affect its business, results of operations and financial condition.

Any material deviation in the utilisation of Proceeds of the Offer shall be subject to applicable law.

Its funding requirements and proposed deployment of the Net Proceeds have not been appraised by any bank or financial institution, and may be subject to change based on various factors, some of which are beyond its control.

The company is subject to stringent labour laws or other industry standards and any strike, work stoppage or increased wage demand by its employees or any other kind of disputes with the company employees could adversely affect its business, financial condition, results of operations and cash flows.

The company has incurred significant indebtedness which exposes it to various risks which may have an adverse effect on its business, results of operations and financial conditions. Conditions and restrictions imposed on it by the agreements governing its indebtedness could adversely affect the company ability to operate its business.

The company failures to keep its technical knowledge confidential could erode the company competitive advantage.

Its ability to pay dividends in the future will depends on the company`s future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

Its Promoters and Promoter Group will continue to retain control over the Company after completion of the Offer, which will allow them to influence the outcome of matters submitted for approval of its Shareholders.

Its Promoters and directors hold Equity Shares in the Company and is therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

This Red Herring Prospectus contains certain non- GAAP financial measures and certain other selected statistical information related to its operations and financial performance. These non-GAAP measures and statistical information may vary from any standard methodology that is applicable across the manufacturing industry, and therefore may not be comparable with financial or statistical information of similar nomenclature computed and presented by other manufacturing companies.

This Red Herring Prospectus contains information from industry sources including the industry report commissioned from Lattice Technologies Private Limited. Prospective investors are advised not to place undue reliance on such information.

The Company will not receive any proceeds from the Offer for Sale portion of the Offer.

The Equity Shares have never been publicly traded and the Offer may not result in an active or liquid market for the Equity Shares. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Offer Price.

Any further issuance of Equity Shares, or convertible securities or other equity linked instruments by it may dilute your shareholding.

Sale of Equity Shares by its Promoters and Promoter Group in future may adversely affect the market price of the Equity Shares.

There are restrictions on daily movements in the trading price of the Equity Shares, which may adversely affect a shareholder`s ability to sell Equity Shares or the price at which Equity Shares can be sold at a particular point in time.

There is no guarantee that the Equity Shares will be listed on the BSE and the NSE in a timely manner or at all.

Holders of Equity Shares may be restricted in their ability to exercise pre-emptive rights under Indian law and thereby suffer future dilution of their ownership position.

QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.

A third party could be prevented from acquiring control of the Company because of anti-takeover provisions under Indian law.

The Company may be subject to pre-emptive surveillance measures like Additional Surveillance Measure (ASM) and Graded Surveillance Measures (GSM) by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors, once the Equity Shares of the Company are listed.