IPO Review: All You Need to Know about Aequs’ ₹922 Cr Public Listing

Aequs Limited makes precise metal parts for big aircraft makers like Airbus and Boeing, and also makes parts for consumer electronics, toys, and cookware. Its IPO opens from 3-5 December 2025 with a price band of ₹118-₹124 per share, issue size of about ₹921.81 crore. The GMP is around ₹46-47, which means some traders expect about 35-40% listing gain, but GMP is only an unofficial street indicator that can change at any time and should never be seen as a guarantee. This blog walks you through Aequs’s business story, where the IPO money goes, its strengths and risks, how it stacks up against peers, valuations, industry tailwinds, and an analyst view, so you can think clearly before investing money.

IPO Overview

• IPO Date: December 3 to December 5, 2025
• Total Issue Size: ₹921.81 crore
• Price Band: ₹118 to ₹124 per share
• Minimum Investment: ₹14,880
• Lot Size: 120 Shares
• Tentative Allotment Date: December 8, 2025
• Listing Date: December 10, 2025 (Tentative)
• GMP: The GMP for the Aequs IPO is ₹46.5, reflecting a 37.5% gain over the issue price, according to Chittorgarh.com.

Disclaimer: GMP is an unofficial indicator and is subject to market volatility.

Business model: What Aequs Really Does

Aequs runs a “one‑stop shop” factory model for precision parts. In simple words, it takes raw metal and turns it into finished, ready‑to‑fit parts for big global customers in one tight cluster instead of sending work to many vendors spread across countries.​ It operates via the following two segments:

Aerospace segment: About 88% of its revenue in the six months to September 2025 came from aerospace, which is the heart of the company. It makes parts for engines, landing gear, and aircraft structures, using hard metals like titanium that need very exact cutting and strict testing set by OEMs (Original Equipment Manufacturers, meaning big brands that build planes).​

Consumer segment: The rest comes from parts for portable computers and smart devices, plastic toys and figurines, and non‑stick cookware. This is still small and loss‑making today, but it uses similar precision tools.​

Aequs’s big idea is “vertical integration” (doing many steps of the production chain in‑house rather than outsourcing). In one Special Economic Zone (SEZ) cluster, it does forging (shaping hot metal), machining (cutting to exact size), surface treatment and painting, and final assembly in one ecosystem. This saves time and transport cost and gives the client one single supplier to deal with instead of 4–5 vendors. It is like a wedding caterer who buys raw food, cooks, plates, and serves everything from one big kitchen instead of outsourcing dessert, drinks, and main course to different places.​

Objectives of the IPO

The IPO size is ₹921.81 crore, with a fresh issue of up to ₹670 crore and an Offer for Sale (OFS) of about ₹251.81 crore. The company gets money only from the fresh issue; OFS cash goes to existing shareholders.​

• Debt repayment of about ₹453.4 crore: Aequs plans to use ₹433.17 crore from the fresh issue, plus ₹20.25 crore already used from pre‑IPO proceeds to repay borrowings taken by the parent and three wholly owned subsidiaries. As of 30 September 2025, total consolidated borrowings were about ₹533.5 crore, and the net debt‑to‑equity ratio was roughly 0.98 times, meaning for every ₹100 of equity, there was about ₹98 of net debt. Clearing over ₹400 crore of this should sharply cut interest costs and reduce financial stress over the next few years.​
• Capital expenditure for new machines, about ₹80.6 crore total: From the fresh issue, ₹64 crore plus ₹16.64 crore already used from pre‑IPO money will go into buying machinery and equipment, largely for the aerospace arm and its subsidiary ASMIPL.
• Inorganic growth and general corporate use: The balance will go into acquisitions and other strategic uses, plus day‑to‑day corporate purposes. Management has not named exact targets yet, so this bucket is more about optionality than a clearly mapped deal pipeline.
• OFS - cashing out by existing investors: Around ₹251.81 crore worth of shares are being sold by private equity funds and promoter entities, and this money does not help the company’s balance sheet. This is simply existing owners booking profits or partial exit at IPO valuation.​

Strengths:

• Unique “Make in India” aerospace cluster in one SEZ: Aequs runs a rare, fully integrated aerospace campus inside one SEZ in India, covering machining, forging, surface treatment, and assembly for aircraft parts. In H1 FY26, the aerospace segment contributed about 88.2% of net external revenue, with an EBITDA margin of about 24.7%, which means that for every ₹100 of aerospace revenue, roughly ₹25 was left after operating costs before interest, tax, and depreciation.​
• Long relationships with global OEMs: The top 10 customer groups bring in over 82% of revenue and have been with the company on average for 11 years. That length of tie‑up means once you are “qualified” in a big aircraft programme, orders can run for years, giving visibility to future revenue, especially when global plane order books are full.
• Strong export and SEZ benefits: Only about 11.44% of revenue in H1 FY26 came from India; the rest is export‑linked, helped by campuses across India, the US, and France. SEZ operations gave duty and tax benefits of about ₹146.75 crore in H1 FY26, equal to roughly 27.3% of revenue from operations in that period, which is a big cost cushion.​
• Capacity in place for future growth: Aequs has about 29.19 lakh machining/moulding hours annually across its plants, but overall capacity use in FY25 was only 41.77%. That means if order flow improves and utilisation rises, revenue can grow faster than capex, and margins can expand as fixed costs are spread over more output.
• Improving recent operating trend: Revenue from operations grew about 18.9% from ₹475.5 crore in H1 FY25 to ₹565.5 crore in H1 FY26, led by aerospace growth, and EBITDA margin improved from about 12.6% to 15.7% over the same period. Net loss narrowed sharply from ₹71.7 crore to about ₹17 crore, mainly because there was no repeat of the big one‑time impairment loss seen earlier, plus better operating performance.​

Risks:

• Still loss‑making with negative return ratios: Aequs has posted losses for three years in a row, with FY25 loss at about ₹102.35 crore, much higher than the ₹14-₹15 crore loss in FY24, partly due to a one‑time goodwill impairment of about ₹48.3 crore in the consumer segment. Return on equity (ROE) is negative (about -14.3% in FY25), and return on capital employed (ROCE) is only about 0.9%, which simply means that every ₹100 put into the business is not yet earning even ₹1 of clean profit today.​
• High leverage and foreign currency exposure: Total borrowings rose from about ₹346 crore in FY23 to about ₹533.5 crore as of H1 FY26. Around 39.9% of this (₹212.9 crore) is unhedged foreign currency debt, so if the rupee weakens, interest and repayment costs in rupee terms can spike and hit profits further.​
• Loss‑making consumer business: The consumer segment has been a drag, with an EBITDA loss of about ₹28.7 crore in FY25 and very low capacity use (about 20.6% in H1 FY26). This means the side business not only fails to earn but also soaks up management time and capital, pulling down the better aerospace arm.
• Slow cash cycle: Aequs’s cash conversion cycle was 253 days in FY25, up from 157 days in FY23. In simple words, it takes about 8-9 months from the time the company spends cash on raw material and work‑in‑progress till it collects cash from customers, which locks working capital and raises the need for more borrowing.
• Customer concentration and order risk: With 82.5% of revenue from the top 10 customer groups and contracts mostly based on “as required” orders rather than fixed long‑term volumes, even one large OEM cutting back or shifting a programme can hurt revenue sharply.
• Capital intensity and margin swings: Precision aerospace machining and forging need heavy investment in machines, surface plants, and tooling, so the business is capital‑intensive. Margins have already swung from about 15.1% EBITDA margin in FY24 to 11.7% in FY25 at the consolidated level, partly due to weak consumer demand and high fixed costs on underused capacity.

For detailed information, visit Aequs’s official IPO page at INDmoney.

Peer Comparison

Aeques’ listed peers include Azad Engineering, Unimech Aerospace, Amber Enterprises, Kaynes Technology, Dixon Technologies, and PTC Industries.

Source: RHP, internal calculation

Aequs has a decent revenue base and an asset base similar to Azad, but it is the only one in this peer set still making losses, with the weakest return ratios and the slowest cash cycle. Azad and Unimech make fatter margins for similar aerospace work, while mass‑electronics players like Dixon earn high returns on much larger revenue even at lower margins, thanks to high efficiency and better working capital management.​

When someone says “Aequs EBITDA margin is 11.7% vs Azad’s 35.3%,” it means that for every ₹100 of sales, Aequs keeps about ₹12 before overheads and finance cost, while Azad keeps about ₹35. That gap shows how much catching up Aequs has to do on utilisation, cost, and mix.​

IPO Valuation

Because Aequs posted a net loss of about ₹102.35 crore in FY25, the Price to Earnings or P/E ratio is not useful.

The main valuation lens is EV/EBITDA. With an EV/EBITDA of about 54.1 times, investors are paying ₹54 for every ₹1 of operating profit. This is a very rich multiple, especially for a company that is still loss-making, has low ROCE, and faces high capital intensity.

The Price to Sales ratio is about 9x. This means investors are paying ₹9 for every ₹1 of revenue, even though revenue from operations fell about 4% year on year in FY25 and capacity utilisation is low. Some pure aerospace peers trade at higher revenue multiples, but they usually have stronger margins and clearer profitability. In contrast, mass manufacturers like Dixon and Amber trade closer to 2-2.5x sales despite being larger and profitable.

Aequs IPO is pricing in a strong future turnaround in profits, better utilisation, and steady demand, rather than giving any discount for current weak earnings. Investors are paying upfront for what Aequs could become three to five years from now, not for what it is today.

People Behind the Company

• Promoter group and control: Aequs is promoted by Aravind Shivaputrappa Melligeri along with three entities, Aequs Manufacturing Investments Pvt Ltd, Melligeri Private Family Foundation, and The Melligeri Foundation. Together, they hold about 63.82% of the company before the IPO, giving them clear control over strategy and long-term direction.
• Aravind Shivaputrappa Melligeri, Executive Chairman and CEO: He has more than 25 years of aerospace experience and led the creation of the Belagavi precision manufacturing SEZ. He holds US citizenship with Overseas Citizen of India status. His main pay is through Aequs Aero Machine Inc. at a fixed salary of $500,000 plus possible variable pay up to $1,000,000, linking his upside to performance.
• Rajeev Kaul, Managing Director: With over 22 years of experience in finance and aerospace, and association with Aequs since 2007, Rajeev handles overall operations across both aerospace and consumer segments. His fixed pay is about ₹1.25 crore a year, with up to 50% extra as variable pay, giving him a strong incentive to improve profitability and asset utilisation.
• Dinesh Venkatachalam Iyer, Chief Financial Officer: Dinesh has around 19 years of finance experience and joined Aequs in 2022. He oversees finance, treasury, risk and governance, and drew around ₹1.23 crore in FY25. He is central to executing the debt reduction, managing foreign currency exposure and tightening cash flows.
• Other key senior figures: Leaders like Company Secretary Ravi Mallikarjun Hugar, senior aerospace head Mohamed Bouzidi, and independent director and former Commerce Secretary Anup Wadhawan add experience in compliance, global customer handling, and policy, which is important for an export-heavy, regulated business.

Who’s Making Money from the IPO?

The Offer for Sale of about ₹251.81 crore lets existing investors cash out.

Most of the selling comes from Amicus Capital funds, which are booking returns of about 4 times their original investment. This is standard for private equity, which invests early, adds value and then exits at a premium.

Promoter-linked entities, including Melligeri Private Family Foundation, are also selling a smaller part. Some reported return numbers, like over 100x for this foundation, look huge but mainly reflect very old, low-cost holdings that have grown over many years. They are not a direct signal about the recent health of the business.

Some individual and family trust investors are also exiting with 3x-4x returns, including Ravindra Mariwala (3x) and Raman Subramanian (1.7x). Overall, the OFS shows that early backers are taking money off the table at a time when the company is still fixing its balance sheet and profitability, while leaving enough skin in the game to stay interested in future growth.

Industry Outlook

The precision-engineered components (PEC) industry makes high‑accuracy parts for sectors like aerospace, semiconductors, medical devices, and energy, largely via contract manufacturing, where OEMs outsource parts to specialists. Globally, this market was about $852.9 billion (₹75 lakh crore) in 2024 and is expected to reach about $1,286.6 billion by 2030, a CAGR of about 7.1%, while India’s own PEC market is expected to grow from roughly ₹2.99 lakh crore in 2024 to about ₹4.95 lakh crore by 2030.

Three big growth drivers help Aequs:

• Large global aircraft order backlog: Airbus and Boeing together had about 15,241 unfulfilled aircraft orders as of July 31, 2025, implying more than 10-14 years of production at present rates, which means steady demand for aircraft parts over a long period.
• “China+1” supply shift: many multinationals are diversifying manufacturing away from China due to cost and geopolitical issues, and India has emerged as a key alternate base, especially in aerospace and electronics.
• Government support: schemes like Production‑Linked Incentives (PLI) and tax breaks for SEZs and defence/aero manufacturing cut costs and encourage investment in local high‑end manufacturing.

On the flip side, the industry faces raw material price swings (steel, titanium, alloys), supply chain risk from any global tension, and a shortage of skilled workers in advanced machining and automation. For a company like Aequs that holds inventory for long periods and runs a 253‑day cash cycle, these shocks can pinch harder than for leaner peers.

Analyst View

Aequs sits at an interesting crossroad. On one side is a strong Make in India aerospace story with high entry barriers, a rare integrated SEZ campus, long-standing global OEM relationships, and a clear focus on moving deeper into complex, higher value parts. The aerospace engine also earns healthy operating margins. If the IPO led debt clean-up works as planned and utilisation picks up, the path to better reported profits over the next 2-3 years looks more visible than in many new-age listings.

On the other side, investors are being asked to pay a rich price today. At around 54x EV/EBITDA and about 9x sales, the market is already pricing in a big improvement in earnings, faster cash conversion, and better capital efficiency. The company is still loss-making, heavily capital-intensive, and exposed to slow working capital cycles, unhedged foreign currency debt, and a loss-making consumer segment that dilutes aerospace strength.

For patients, well-informed investors with surplus cash and a 5-7 year view, Aequs can be seen as a focused aerospace manufacturing bet with optional upside from a turnaround in the consumer businesses. They may choose to invest a moderate amount, fully aware of the risks.

For conservative or first-time investors who prefer clear profits and modest valuations, it may be wiser to watch a few post-listing quarters, track how debt, margins, and cash flows move, and then decide. In short, this IPO suits high-risk, long-term pockets, not core low-risk capital.

For a seamless application process, visit the INDmoney IPO page.

Disclaimer

Source: Aequs's RHP. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Please be informed that merely opening a trading and demat account will not guarantee investment in securities in the IPO. Investors are requested to do their own independent research and due diligence before investing in an IPO. Please read the SEBI-prescribed Combined Risk Disclosure Document prior to investing. This post is for general information and awareness purposes only and is nowhere to be considered as advice, recommendation, or solicitation of an offer to buy or sell, or subscribe for securities. INDstocks is acting as a distributor for non-broking products/services such as IPO, Mutual Fund, and Mutual Fund SIP. These are not exchange-traded products. All disputes with respect to the distribution activity would not have access to the Exchange investor redressal forum or the Arbitration mechanism. INDstocks Private Limited (formerly known as INDmoney Private Limited) does not provide any portfolio management services, nor is it an investment adviser. Logos above are the property of respective trademark owners, and by displaying them, INDstocks has no right, title, or interest in them. SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.