Aequs
IPO Size: Rs. 922 cr
- Fresh Issue of Rs. 670 cr for (i) Rs. 433 cr debt repayment to become nearly net debt free post IPO (ii) Rs. 64 cr capex (iii) unindentified acquisition and general corporate purposes
- Offer for Sale (OFS) of Rs. 252 cr, mainly by investor Amicus halving 6% stake (bagging 4x return in <3 years) and a minor portion by the promoter (64% stake to drop to 59% post IPO)
Price band: Rs. 118-124 per share
- Rs. 144 cr pre-IPO on 10th Nov 2025, at Rs.124 per share
M cap: Rs. 8,316 cr, implying 11% dilution
- Only 10% retail as company is loss making
IPO Date: Wed 3rd Dec to Fri 5th Dec 2025, Listing Wed 10th Dec 2025
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Aerospace and Consumer Durables Component Maker
Aequs Limited, established in 2006 as Quest by an NRI technocrat, is a Belagavi based integrated high-precision engineering and product company, with 2.92 million pa installed capacity at Karnataka, US and France, which is ~45% utilised at present. Business is split into two divisions:
- Aircraft Components for engine, landing, cargo and interiors, structures, assemblies and turning for clients such as Airbus, Boeing, Bombardier, Safran, Dassault, Collings Aerospace, Spirit, Honeywell, Eaton. It has among the largest aerospace components portfolio in India, accounting for 90% of company’s Rs. 925 cr topline and 25% EBITDA margin.
- Consumer Durables such as small home appliances, plastics (outdoor toys, figurines, toy vehicles) for Hasbro, Spinmaster, Wonderchef, Tramontina and components for portable computers and smart devices (MacBook and Apple watches, as per media reports), accounting for 10% of topline, but clocking negative 24% EBITDA margin presently, as capacity is <20% utilised. It has invested Rs. 350 cr between FY23-25 to increase consumer durables capacity.
High Growth Visibility
Company has invested in capacity expansion for both aerospace and consumer verticals and has also qualified under Government’s PLI scheme for electronic components. Its net fixed assets have doubled in H1FY26 to Rs. 400 cr as of 30.9.25, from Rs. 167 cr as of 31.3.25. In addition to this, capital work in progress (CWIP) stands at Rs. 346 cr, as of 30.9.25, providing healthy visibility for future growth, given 1.8x asset turn.
High Margin Business
Of the Rs. 925 cr revenue in FY25, 25% each was generated from US and France and 13% from UK. Aerospace business has matured, clocking 25% EBITDA margin, but consumer durables is a drag on profitability, due to under-utilisation of capacity. FY25 gross margin was at 60%, with EBITDA excluding other income at Rs. 73 cr, translating into 8% margin. FY25 net loss stood at Rs. 94 cr, partly due to Rs. 48 cr goodwill impairment.
H1FY26 revenue grew 17% YoY to Rs. 537 cr, with EBITDA excluding other income at Rs. 56 cr, or 10% margin. It reported net loss of Rs. 17 cr for H1FY26, on negative operating leverage. While inventory outstanding at 5 months is on the higher side, debtors are under 2 months. Net debt will also be negligible post IPO.
Long Term Triggers in place
M cap of Rs. 8,300 cr and similar enterprise value implies an EV/EBITDA multiple of 48x and a revenue multiple of about 8x, on current year basis. Peers Azad Engineering, Unimech Aerospace are ruling at 20x revenue and 50x+ EBITDA, for nearly half the topline, albeit higher operating margin of 33-35% (as against 25% for Aequs) and a green bottomline.
While consumer durables segment is presently a drag on earnings, debt repayment from IPO proceeds and capacity ramp-up, may lead to a net profit, from FY27E onwards. Larger scale operations, recent capex, high entry barriers and sector tailwinds for global aerospace industry are key attractions for Aequs over the long term.
