Gallard Steel IPO ready for listing. GMP hints at strong debut after healthy subscription

Gallard Steel is set to make its market debut on Wednesday, with early sentiment pointing to a sharp premium as the gray market premium (GMP) on the eve of listing stands at around 38%. The engineering castings maker closed its Rs 37.5 crore SME IPO last week with one of the highest subscription numbers on the BSE SME platform this year, driven by outsized demand from non-institutional and retail investors.The issue, priced at Rs 150 per share, was subscribed a total of 375.54 times. The non-institutional category led the frenzy with 624.56 subscriptions, while the retail book was recorded 351.58 times. Qualified institutional buyers also participated aggressively and subscribed 228.48 times the allocated quota.

The extreme oversubscription has affected the run-up in unofficial market activity, with the IPO now having a GMP in the range of 38%, implying a potential listing price of around Rs 205-210 per share, depending on market conditions at opening.Gallard Steel raised Rs 10.64 crore from anchor investors on November 18. The anchor lock-in for 50% of the shares ends on December 24, while the rest will unlock on February 22.

Business overview

Gallard Steel produces steel castings and ready-made components for the Indian railways, defense sector, power generation companies and heavy engineering industries. The product portfolio includes traction motor components, bogie components, turbine sub-assemblies, defense cradle systems and specialized high temperature industrial liners. The company also produces rebonded foam for furniture and industrial uses.

Located in Pithampur (Madhya Pradesh), the manufacturing facility covers over 12,000 square meters and is equipped with in-house melting, casting, machining, heat treating and finishing capabilities. This backward integration allows the company to maintain quality control and target diversified rail, defense and industrial equipment customers.

Financially, the company has reported strong growth over the past two financial years. Revenue rose 92% to Rs 53.52 crore in FY25, while net profit rose 90% to Rs 6.07 crore. EBITDA almost doubled to Rs 12.47 crore.

The proceeds from the IPO will be used for expansion of the existing manufacturing facility and construction of an office building (Rs 20.14 crore), loan repayment (Rs 7 crore) and general corporate purposes.

While the company’s financial trajectory and oversubscription have helped gray market sentiment, its valuation and relatively small post-listing share base suggest that liquidity and volatility may remain important factors to watch.

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