Aequs

• Aequs is coming out with a 100% book building; initial public offering (IPO) of 7,71,04,477 shares of 10 each in a price band Rs 118-124 per equity share. 
• Not more than 75% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 10% for the retail investors.
• The issue will open for subscription on December 03, 2025 and will close on December 05, 2025.
• The shares will be listed on BSE as well as NSE.
• The face value of the share is Rs 10 and is priced 11.80 times of its face value on the lower side and 12.40 times on the higher side.
• Book running lead managers to the issue are JM Financial, IIFL Capital Services and Kotak Mahindra Capital Company.
• Compliance Officer for the issue is Ravi Mallikarjun Hugar.

Profile of the company

Aequs is the only precision component manufacturer operating within a single special economic zone in India to offer fully vertically integrated manufacturing capabilities in the Aerospace Segment, which sets it apart from other contract manufacturers with selective manufacturing capabilities amongst its peers. Precision components are precisely machined parts that are designed and manufactured to exact specifications and are commonly supplied to OEM customers and system integrators. It had one of the largest portfolios of aerospace products in India, as of March 31, 2025. Its diverse product portfolio includes components for engine systems, landing systems, cargo and interiors, structures, assemblies and turning for its aerospace clients.

The company’s advanced manufacturing capabilities also enable it to enter into new business segments by leveraging existing capabilities. While it primarily operates in the Aerospace Segment, over the years, the company has expanded its product portfolio to include consumer electronics, plastics, and consumer durables for its consumer clients. The company’s diverse consumer product portfolio includes consumer durables such as cookware and small home appliances, plastics such as outdoor toys, figurines, toy vehicles and components for consumer electronics such as portable computers and smart devices.

The company is one of the few manufacturers in India with niche metallurgy capabilities, specializing in precision machining of high-end alloys, including titanium alloys for its aerospace clients. Further, the company is the leading company within a single special economic zone in terms of end-to-end manufacturing capabilities (machining, forging, surface treatment and assembly) for the Aerospace Segment in India, based on the number of capabilities and approvals.

Proceed is being used for:

• Repayment and/ or prepayment, in full or in part, of certain outstanding borrowings and prepayment penalties, as applicable, availed by: (a) the company; and (b) three of its wholly-owned Subsidiaries, AeroStructures Manufacturing India Private Limited, Aequs Consumer Products Private Limited and Aequs Engineered Plastics Private Limited, through investment in such Subsidiaries
• Funding capital expenditure to be incurred on account of purchase of machinery and equipment by: (a) the company; and (b) one of its wholly-owned Subsidiaries, AeroStructures Manufacturing India Private Limited, through investment in such Subsidiary
• Funding inorganic growth through unidentified acquisitions, other strategic initiatives and general corporate purposes

Industry Overview

India has emerged as one of the most significant markets for aircraft orders, reflecting the rapid growth of its aviation sector. A booming economy, increasing middle-class affluence, and expanding urbanization have driven the demand for air travel in India. These factors, coupled with a growing appetite for domestic and international travel, have spurred Indian airlines to expand and modernize their fleets significantly. India's aircraft manufacturing market is rapidly growing, fuelled by rising air travel demand and e-commerce. The country is emerging as a key hub for aircraft manufacturing, assembly, and maintenance due to its strategic location and economic growth. A shift toward indigenous production is evident, with companies like Hindustan Aeronautics Limited (HAL) collaborating with global giants like Airbus and Boeing to enhance local manufacturing capabilities.

India's export of aerospace-engineered components had witnessed significant growth, reflecting the country's rising capabilities in precision manufacturing and its expanding role in the global aerospace supply chain. In FY2019, aerospace component exports accounted to Rs 119.37 billion ($1.71 billion), driven by increased participation of Indian manufacturers in global aerospace programs, government initiatives like Make in India, and strategic partnerships with leading international aerospace firms. In FY2025, the exports reached Rs 588.38 billion ($6.96 billion). The push towards self-reliance in defense and aerospace, along with favourable policies and infrastructure development, is positioning India as a key supplier of high-quality aerospace components to global markets. Aequs has one of the largest portfolios of aerospace products in India, as of March 31, 2025.

India is rapidly emerging as a key destination for aerospace manufacturing, driven by several strategic factors that position the country as an attractive hub for global aerospace companies and local manufacturers. India offers a cost advantage, with competitive labor costs and lower overheads compared to other established aerospace manufacturing hubs like the US and Europe. This cost efficiency makes India an attractive destination for the Global Aerospace companies. Additionally, India has made significant strides in developing a skilled workforce in aerospace engineering and manufacturing. The government's emphasis on education, training programs, and partnerships with aerospace companies ensures a steady supply of qualified professionals to meet the sector's growing needs. 

Pros and strengths

Integrated end-to-end aerospace manufacturing leader: The company is leading company within a single special economic zone in terms of end-to-end manufacturing capabilities (machining, forging, surface treatment and assembly) for the Aerospace Segment in India, based on the number of capabilities and approvals. Across its three manufacturing ecosystems in India and two dedicated aerospace facilities outside India, that it operates in, it had an aggregate capacity of 2,919,058 annual machining/molding hours for products within the Aerospace Segment and Consumer Segment, and over 200 computer numerical control (CNC) machines for Aerospace Segment and 161 molding machines deployed for consumer products, each as of September 30, 2025. The company’s extensive machining capabilities enable it to manufacture critical and complex components, such as engine systems, landing systems, at a large scale and in a timely manner.

Unique vertically integrated precision manufacturing advantage: The company is only precision component manufacturer operating within a single special economic zone in India to offer fully vertically integrated manufacturing capabilities in the Aerospace Segment, which sets it apart from other contract manufacturers with selective manufacturing capabilities amongst its peers. There is a high barrier to enter precision manufacturing business segments, due to the substantial investment required to establish advanced precision manufacturing capabilities, develop proof of concept and cultivate relationships with global OEMs. The company’s capabilities and the success of the manufacturing ecosystems are the result of over two decades of experience and collaboration with customers and suppliers, providing it competitive advantages within the precision component manufacturing industry.

Global footprint across three continents enhancing OEM proximity: The company has a manufacturing presence across India, U.S. and France, with strategic proximity to global OEMs, which enables it to create innovative products and engineering solutions for these OEMs. The company is one of the few companies in India in the Aerospace Segment with a presence in three continents, which enables access to skilled workforce with diverse backgrounds and expertise, apart from the closeness to the customer which helps in its long-term customer relationships.

Deep customer loyalty driving majority of revenue: The company has established long-standing relationships with high entry barrier global customers, such as Airbus, Collins Aerospace, Spirit Aerosystems Inc., Safran and Boeing in the Aerospace Segment, and Hasbro, Spinmaster, Wonderchef, and Tramontina in the Consumer Segment. Over the years, it has also established itself as Tier-1 suppliers for such OEM customers. As of September 30, 2025, the company’s three largest customer groups had an average tenure of 15 years with it. The company’s five largest customer groups collectively accounted for 66.36%, 69.71%, 73.17%, 69.08% and 65.84% of its revenue from operations for the six months period ended September 30, 2025 and 2024, and the Financial Years 2025, 2024 and 2023, respectively. Further, its relationships with these key customers enable access to a substantial portion of the end market.

Risks and concerns

High revenue dependence on aerospace segment: The company has derived a significant portion of its net external revenue from the Aerospace Segment (88.23% for the six months period ended September 30, 2025, 86.00% for the six months period ended September 30, 2024, 89.19% for the Financial Year 2025, 78.44% for the Financial Year 2024 and 72.06% for the Financial Year 2023). Any decrease in demand of products within the Aerospace Segment or any development that makes the sale of products within the Aerospace Segments less economically beneficial may adversely affect its business, results of operations, financial condition and cash flows.

Revenue concentration risk from key customer groups: The company is dependent on its ten largest customer groups, which comprise a significant portion of its revenue from operations (82.51% for the six months period ended September 30, 2025, 85.56% for the six months period ended September 30, 2024, 88.57% for the Financial Year 2025, 86.51% for the Financial Year 2024 and 86.48% for the Financial Year 2023). Any failure to maintain its relationship with these customer groups or any adverse changes affecting their financial condition will have an adverse effect on its business, results of operations, financial condition and cash flows.

Geographic concentration exposes operations to regional risks: The company operates units in three manufacturing clusters in India, Belagavi Manufacturing Cluster, Hubballi Manufacturing Cluster and Koppal Manufacturing Cluster all situated in the state of Karnataka. The concentration of the units in the manufacturing clusters that it operates in, in the state of Karnataka exposes it to regional risks and adverse events specific to the state. These regional risks include disruptions to infrastructure, significant natural disasters, workforce disruptions, changes in general economic and political conditions, civil unrest, the regulatory environment, and local government policies, among others.

Continued losses and impairment provisions pose financial challenges: The company has incurred losses of Rs (169.77) million, Rs (717.00) million, Rs (1,023.46) million, Rs (142.44) million and Rs (1,094.95) million for the six months period ended September 30, 2025 and 2024, and the Financial Years 2025, 2024 and 2023, respectively and it has made provisions for impairment of goodwill in its Subsidiaries. The company may continue to experience losses in the future and may be required to make similar provisions for impairment, which could result in an adverse effect on its business, results of operations, financial condition and cash flows.

Outlook

Aequs is engaged in manufacturing and operating a special economic zone in India to offer fully vertically integrated manufacturing capabilities in the Aerospace Segment. The company has advanced and vertically integrated precision manufacturing capabilities. It has comprehensive precision product portfolio across high value segments. On the concern side, the company has derived a significant portion of its net external revenue from the Aerospace Segment and any decrease in demand of products within the Aerospace Segment or any development that makes the sale of products within the Aerospace Segments less economically beneficial may adversely affect its business, results of operations, financial condition and cash flows. Moreover, the company is dependent on its ten largest customer groups, which comprise a significant portion of its revenue from operation and any failure to maintain its relationship with these customer groups or any adverse changes affecting their financial condition will have an adverse effect on its business, results of operations, financial condition and cash flows. 

The issue has been offering 7,71,04,477 shares in a price band of Rs 118-124 per equity share. The aggregate size of the offer is around Rs 909.83 crore to Rs 956.10 crore based on lower and upper price band respectively. Minimum application is to be made for 120 shares and in multiples thereon, thereafter. On performance front, the company’s revenue from operations increased by 17.03% to Rs 5,371.59 million for the six months period ended September 30, 2025 from Rs 4,589.73 million for the six months period ended September 30, 2024, primarily due to an increase in revenue from contracts with customers. Moreover, its loss for the period decreased to Rs (169.77) million for the six months period ended September 30, 2025 from the loss of Rs (717.00) million for the six months period ended September 30, 2024.

The company has scaled the volume of products sold to its customers in the Aerospace Segment in the past. Going forward, as a part of its growth strategy, the company aims to increase wallet share from existing customers in Aerospace Segment. The company plans to execute this strategy by increasing the utilization of available capacity at its existing facilities and by strengthening and localizing its supply chain in India. As part of this approach, the company intends to selectively engage sub-contractors for lower value-added activities within the supply chain ecosystem. This will enable it to allocate internal resources and manufacturing capacity toward higher value-added and more complex components, thereby moving up the value chain. These efforts will also support its ability to remain competitive and provide comprehensive, end-to-end solutions to its customers.