The much-anticipated initial public offering (IPO) of Aequs, a leading precision manufacturing player, is scheduled to open for public subscription on Wednesday, December 3. The mainboard public issue, aiming to raise ₹922 crore, will conclude its bidding window on Friday, December 5.
Aequs IPO: Key Details and Financial Structure
The Aequs IPO comprises a fresh issue of equity shares worth ₹670 crore and an offer for sale (OFS) of shares aggregating to ₹251.81 crore by existing shareholders. The company has set a price band of ₹118 to ₹124 per share. For retail investors, the minimum investment required is ₹14,880, considering the lot size of 120 shares at the upper end of the price band.
The allocation strategy reserves 75% of the net offer for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and the remaining 10% for retail individual investors. The lead manager for the issue is JM Financial Ltd., while Kfin Technologies Ltd. is the registrar.
A significant portion of the fresh proceeds, approximately ₹433 crore, is earmarked for the repayment or prepayment of debt of the company and its subsidiaries. Another ₹64 crore will be used for the purchase of new machinery and equipment, with the balance allocated for inorganic growth initiatives and general corporate purposes.
Strong Grey Market Premium and Brokerage Views
Ahead of its public debut, the shares of Aequs are commanding a robust premium in the unofficial grey market. According to market observers like Investorgain, the grey market premium (GMP) for the Aequs IPO is currently at ₹46.5. This indicates an estimated listing price of around ₹170.5 per share, which would be a substantial 37.5% gain over the upper price band of ₹124.
Brokerage firms have largely given a thumbs-up to the issue, albeit with a long-term perspective. Anand Rathi has assigned a 'Subscribe for Long-Term' rating. The brokerage notes that Aequs aims to deepen its engagement with existing aerospace clients by moving up the value chain while also broadening its customer base. "At the upper price band, the company is valued at 8.9x FY25 P/S... The consumer business adds significant upside, though smooth execution is required," the firm stated.
Similarly, Swastika Investmart has also recommended a 'Subscribe' rating. It highlights Aequs's unique position as a high-barrier entry into the aerospace and defence supply chain. The firm pointed out that while the company is currently loss-making, it is priced lower than peers on a Price-to-Book basis, offering a niche investment opportunity for aggressive long-term investors.
The Aequs Business Model and Market Position
Aequs holds a distinctive position in the Indian manufacturing landscape. It is the only precision component manufacturer in the country that operates from a single Special Economic Zone (SEZ), providing fully vertically integrated manufacturing solutions primarily for the global aerospace industry. This integrated model allows for greater control over quality and supply chain efficiency.
Beyond aerospace, the company has diversified its portfolio into consumer electronics, plastics, and consumer durables segments. It plans to leverage its advanced aerospace manufacturing capabilities to scale up production and grow its customer base in the consumer electronics vertical, which is seen as a major growth driver.
The IPO's timing capitalizes on the ongoing global supply chain realignment and strong policy support from the Indian government for domestic manufacturing, particularly in the aerospace and defence sectors under initiatives like 'Make in India'.
The share allotment for the Aequs IPO is expected to be finalized on December 8, with the equity shares scheduled to list on both the BSE and NSE on December 10. Investors should note that the company raised ₹414 crore from anchor investors ahead of the public issue opening.
