IPO closes on 5 Dec'25
Aequs Ltd
Minimum Investment
₹ 14,880 / 120 shares
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- Investors with a high risk appetite may consider the issue for potential listing gains amid strong sector sentiment. However, for conservative and long-term investors, it is sensible to avoid the issue at this stage and reassess once the company demonstrates a sustained turnaround in profitability and balance-sheet strength.
- Aequs’ IPO offers a unique opportunity to participate in India’s expanding aerospace and defence supply chain. The company has built a differentiated, high-entry-barrier aerospace franchise anchored within its integrated SEZ ecosystem. However, the company continues to report losses and a negative return on net worth, which dilute the strength of its narrative.
- A significant portion of the IPO proceeds is aimed at improving the balance sheet and reducing leverage. Of the total proceeds, about Rs 433 crore will go towards debt repayment, offering partial relief to the company’s elevated leverage position.
- Strategically, Aequs still stands out. It is one of India’s most scaled aerospace component manufacturers, supplying global programmes through relationships with Airbus, Boeing, Safran and Collins. Over the longer term, the global diversification of supply chains away from China and increasing domestic indigenisation in civil and defence platforms provide a strong structural tailwind for the company.
- But these long-term positives are overshadowed by near-term financial stress. FY25 saw a 4% decline in revenue, accompanied by a steep widening of net loss to about Rs 102.35 crore. Leverage remains high, with net debt at around Rs 789 crore as of September 30, 2025.
- Operationally, the aerospace segment continues to be the primary growth driver, contributing nearly 88% of total revenue and delivering strong EBITDA margins of around 25% in H1FY26. Meanwhile, the consumer segment remains loss-making, reporting a negative EBITDA margin of approximately (24%).
About the company
Founded in
27 Mar'00
Managing director
Rajeev Kaul
- Aequs is India’s only precision component manufacturer operating within a single Special Economic Zone (SEZ) that delivers fully vertically integrated aerospace production — spanning forging, machining, surface treatment and final assembly.
- The company supplies precision-machined components to major global OEMs and holds one of the widest aerospace product portfolios in the country, covering engine systems, landing gear, structural components, cargo and interior parts and complex assemblies.
- While aerospace remains its flagship business, Aequs has expanded into consumer electronics, plastics and consumer durables. Its consumer division manufactures cookware, small appliances, toys and precision components for smart devices, enabling the company to diversify beyond its core aerospace operations.
STRENGTHS
- Fully Integrated Manufacturer: Aequs is one of India’s most prominent precision manufacturers, distinguished by its fully integrated, end-to-end capabilities. With over 2.9 million machining and moulding hours, more than 200 CNC machines for aerospace and 161 moulding machines for consumer products, the company delivers complete production of complex, high-precision components. Its operations are consolidated within a single SEZ, creating a powerful strategic moat—bringing forging, machining, surface treatment and assembly together in one location. This integrated ecosystem significantly reduces cost, lead times and logistical complexity. Replicating such infrastructure would demand years of regulatory approvals and substantial capex, resulting in strong entry barriers and a meaningful first-mover advantage.
- Sticky Client Relationships: The aerospace industry involves long, certification-heavy qualification cycles, creating natural stickiness in customer relationships. Aequs has successfully navigated these stringent processes to embed itself into the supply chains of global OEMs such as Airbus, Boeing and Collins Aerospace, ensuring high customer retention and multi-year visibility.
- Diversified Product Portfolio: Unlike pure-play aerospace manufacturers, Aequs has built meaningful scale across consumer durables, plastics, industrial components and toys. This diversification helps cushion revenues during aerospace down-cycles while leveraging shared infrastructure to improve cost efficiency and margins. The company is also expanding its presence in consumer categories such as cookware and non-stick pans, aiming to deepen partnerships with global consumer-durable brands.
RISK FACTORS
- Weak Earnings Profile: Despite its technical strengths, Aequs continues to underperform financially. The company has reported net losses for three consecutive years and its operating margins remain significantly below those of peers such as Azad Engineering and Unimech Aerospace.
- Client Concentration: Aequs’ revenue base is heavily concentrated on a few clients. In FY25, the top 10 customers accounted for nearly 88% of operating revenue, with the top five alone contributing over 73%. Any reduction in orders from major OEMs or changes in their global sourcing strategy, could materially affect revenue visibility and financial stability.
- Low Capacity Utilisation: Capacity utilisation has remained below 50% for the last three years, signalling slow scale-up, underused assets and weaker-than-expected conversion of installed capacity into revenue. Sustained underutilisation also depresses margins and delays operating leverage.
- Loss-Making Consumer Segment: The consumer division continues to incur losses, even as the company expands into components for portable computers, smart devices and consumer durables. This exposes Aequs to a high-volume, low-margin, rapidly evolving market that differs fundamentally from its core high-precision aerospace operations. The diversification adds operational complexity without clear evidence of profitability.
- Exposure to Global Risks: A large share of Aequs’ revenue is derived from direct and indirect exports, with domestic sales contributing only 11.44% in H1FY26 and 10.74% in FY25. This dependence increases exposure to global legal, regulatory, tax and geopolitical risks. For instance, recent U.S. tariff measures on several Indian export categories have created uncertainty for Indian exporters. Any escalation in trade barriers or tightening of international compliance norms could adversely impact margins and cash flows.
Financials
All Values are in Cr.
Issue details
Issue type
Mainstream
Issue size
₹ 921.81 crore
Fresh Issue
₹ 670 crore
OFS
₹ 251.81 crore
Price range
₹ 118 - 124
Lot size
120 shares
Issue Objective
The fresh proceeds from the net issue will be utilised towards the following purposes:
- Repayment or prepayment of certain outstanding borrowings of the company and three of its subsidiaries;
- Purchase of machinery and equipment for the company and one of its subsidiaries; and
- Funding inorganic growth through future, unidentified acquisitions, strategic initiatives and for general corporate purposes.
Dates
Bidding open
3 Dec'25
Bidding close
5 Dec'25
Allotment date
8 Dec'25
Refund date
9 Dec'25
Listing
10 Dec'25
IPO Reservations
Qualified institutional buyers
>75%
Non-institutional investors
<15%
Retail individual investors
<10%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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