Financial Daily from THE HINDU group of publications
Thursday, Dec 22, 2005
Gala Precision gets Rs 50 cr from GW Capital Money to be used for acquisitions, plant in Chennai
Bangalore , Dec. 21
AUTO component maker Gala Precision Technology has received Rs 50 crore funding from private equity firm GW Capital, which will be used to set up a manufacturing plant in China and part-fund acquisitions.
The Gala Precision Technology Managing Director, Mr Kirit Gala, told Business Line that the company will invest over Rs 150 crore across three years on acquisitions, capacity expansion and for setting up the plant in China.
He said the plant would be set up in Shanghai in April 2006 to cater to the Chinese market. Gala Precision has a marketing firm in China, which services clients such as Sanyo and LG Electronics.
It also plans to set up an office in Frankfurt next year.
The company expects to post a turnover of around Rs 350 crore by 2009-10. Its projected turnover for the current year is Rs 70 crore.
Gala Precision, which manufactures critical engineering components for compressors and auto applications such as valves and springs, has assembly and manufacturing units in Gujarat and Maharashtra.
It has a 70-per cent market share in mass finishing solutions. Gala's clients include Sundram Fasteners, Tecumseh, Delphi TVS and Panasonic.
Mr Gala said the Shanghai plant would also supply components to manufacturers in South Korea and Japan.
He said GW Capital had released Rs 15 crore to Gala Precision in the first tranche.
"The rest (of the funding) will be released depending on how fast we acquire a plant," he said.
He did not say how much stake GW Capital has in Gala Precision.
He said the company is also investing in research and development.
"We are putting together an R&D team to help scale up our knowledge base," Mr Gala said.
GW Capital's business manager, Mr Sanjay Arte, said the company may consider another round of funding for Gala Precision based on its growth. "If required, we can look into it," he said.
Gala Precision was funded out of GW Capital's second fund worth $150 million.
GW Capital has funded companies such as Biocon, Fab Mall, Shringar Cinema and Centurion Bank and it also owns an FM radio station, Radio City.
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