Courtesy: https://www.chittorgarh.com/
Review By Dilip Davda on November 29, 2025
- The company is engaged in the manufacturing of prevision components primarily for aerospace segment.
• It is also engaged in the manufacturing of consumer electronics, plastics and consumer durables.
• Though its aerospace division is making profits, other business continuing to make losses.
• Based on its recent financial data, the issue is priced at a negative P/E.
• Well Informed/cash surplus investors may park moderate funds for long term.
ABOUT COMPANY:
Aequs Ltd. (AL) 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 us apart from other contract manufacturers with selective manufacturing capabilities amongst peers (Source: F&S Report). Precision components are precisely machined parts that are designed and manufactured to exact specifications and are commonly supplied to OEM customers and system integrators. The company had one of the largest portfolios of aerospace products in India, as of March 31, 2025 (Source: F&S Report). Its diverse product portfolio includes components for engine systems, landing systems, cargo and interiors, structures, assemblies and turning for aerospace clients. For the six months period ended September 30, 2025 and the Financial Year 2025, its net external revenue from the Aerospace Segment was Rs. 473.95 cr. and Rs. 824.64 cr., respectively.
AL’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 product portfolio to include consumer electronics, plastics, and consumer durables for consumer clients. Its 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. It is one of the few manufacturers in India with niche metallurgy capabilities, specializing in precision machining of high-end alloys, including titanium alloys for aerospace clients (Source: F&S Report). Further, it 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 (Source: F&S Report).
AL operates in three unique, engineering-led vertically integrated precision manufacturing “ecosystems” in India (Source: F&S Report). These manufacturing ecosystems comprise Company, few of its suppliers and Joint Ventures, which allow it to manufacture products in accordance with clients’ specifications. Global aerospace companies, such as Airbus and Boeing are focused on enhancing their supply chain efficiency and accordingly, prefer suppliers who are able to offer “one-stop-shop” capabilities to support their complex manufacturing and integration needs, due to the benefits associated with quality management, cost and working capital efficiencies (for instance, on account of reduced logistics and warehousing costs as a result of co-located facilities), reduced lead times and reduced global carbon footprint (Source: F&S Report). Its manufacturing ecosystems enable large-scale, timely production of complex products, meeting global OEMs’ stringent requirements in both Aerospace Segment and Consumer Segment. In recent years, the company has strategically prioritized the selective outsourcing of lower value-added activities, including 3-axis and 4-axis machining, within and outside its manufacturing ecosystem to third party subcontractors, allowing it to concentrate on producing more complex and higher value components through higher value-added activities, including 5-axis machining.
While the company continue to maintain capacity in 3-axis and 4-axis machining, its focus going forward is on expanding capabilities in 5-axis machining, as it moves up the value chain. Further, it aims to leverage existing aerospace manufacturing capabilities to diversify customer base in Aerospace Segment by pursuing opportunities to develop new relationships and strengthening its presence in the Aerospace Segment. As of September 30, 2025, AL produced over 5,000 products within the Aerospace Segment under a variety of manufacturing and assembly programs established with its aerospace customers, including programs for single aisle (such as A220, A320, B737) and long range (A330, A350, B777, B787) commercial aircrafts.
It had one of the largest portfolios of aerospace products in India, as of March 31, 2025 (Source: F&S Report). The combination of its scales, vertically integrated manufacturing ecosystems and qualified engineering talent enables it to scale production while meeting contracted timelines with stringent quality and safety standards. This has also allowed it to achieve 100% in-country value addition for select products. The company performs own quality checks on suppliers, by regularly monitoring and ensuring that the raw materials supplied to it meets and its customers’ stringent quality standards, which in turn provides it with an ability to have better control over quality and increase competitive ability. The Company has instituted a quality assurance framework to ensure that all materials and products meet both international standards and those of its customers. The company conducts quality checks on suppliers, sourcing raw materials exclusively from approved and qualified vendors. Each manufacturing facility is supported by a dedicated quality assurance team that conduct thorough inspections at all stages of production, from raw material intake to final output. Its manufacturing facilities within its manufacturing clusters hold multiple internationally recognized certifications such as ISO 9001:2015, AS9100D, and NADCAP. AL’s quality control infrastructure, including inspection equipment such as coordinate measuring machines, optical measuring machines and non-destructive testing equipment, supports precise validation of product specifications. In addition, its manufacturing facilities are periodically inspected and audited by regulatory authorities and customers.
The company commenced manufacturing of aero-structure components and aero-engine components, for aerospace clients in its units in the Belagavi Manufacturing Cluster in 2009. Over the past 15 years, it has consistently grown its business by developing and acquiring new manufacturing capabilities, and diversifying product portfolio and customer base across the Aerospace Segment and Consumer Segment. AL strategically expanded its manufacturing operations in North America and France, through acquisitions in 2015 and 2016, respectively, which has allowed it to acquire new capabilities in the Aerospace Segment, grow footprint in North America and Europe, and expand its portfolio of products.
The company has also entered into joint ventures to enhance its capabilities to develop new products and deliver engineering solutions, by harnessing the complementary expertise of its joint venture entities for production of complex and niche products required by customers. Its joint venture SQuAD Forging India Private Limited (“SQuAD”), has equipped it with enhanced capabilities to, among others, forge small to medium-sized aero structural parts for engines, landing gear and braking system components in aluminium, steel, titanium or nickel based alloys. Further, its joint venture with Magellan Aerospace Limited, Canada formed in 2007, Aerospace Processing India Private Limited (“API”), has enabled it to provide innovative surface treatment solutions. Further, its joint venture with Tramontina, Aequs Cookware Private Limited equips it with technical capabilities to develop innovative consumer products. However, its existing joint ventures may be discontinued in the future, and future joint ventures exposes it to other potential risks, including risks associated with unforeseen or hidden liabilities, sharing proprietary information, among others.
The company operates within precision manufacturing vertical for electronic components which is specifically notified as 3. eligible sectors under various Production Linked Incentive (“PLI”) schemes promulgated by the Government of India as well as corollary incentive frameworks introduced by several State Governments. In furtherance of its growth plans and with a view to enhancing domestic value addition, backward integration and import substitution, the Company intends to participate in and secure incentives available under (i) the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors for establishing and expanding its electronics manufacturing services line for precision sensor modules and control units, and (ii) complementary State-level capital subsidy, interest subsidy, stamp duty exemption, electricity duty exemption and SGST reimbursement programmes, thereby optimizing its capital expenditure structure, accelerating capacity expansion and reinforcing its competitive cost position.
By systematically leveraging these initiatives, each designed to reward incremental sales, promote scale, foster technological innovation and cultivate globally competitive manufacturing capabilities, the Company expects to enhance its return on invested capital, diversify its customer base, deepen localization of its supply chain and fortify its status as a preferred partner to original equipment manufacturers. As of September 30, 2025, it had 1892 employees on its payroll, 1834 contract labourers, 55 trainees, 432 apprentices and 325 fixed term employees.
ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route combo IPO worth Rs. 921.81 cr. (approx. 74339651 equity shares of Rs. 10 each at the upper cap). The issue comprises of fresh equity issue worth Rs. 670.00 cr. (approx. 54032258 shares at the upper cap) and an Offer for Sale (OFS) of 20307393 equity shares (worth Rs. 251.81 cr. at the upper cap). The company has announced a price band of Rs. 118 – Rs. 124 per equity shares of Rs. 10 each. The issue opens for subscription on December 03, 2025, and will close on December 05, 2025. The minimum application to be made is for 120 shares and in multiples thereon, thereafter. Post allotment, shares will be listed on BSE and NSE. The issue constitutes 11.08% of the post-IPO paid-up equity capital. From the net proceeds of the fresh equity issue, the company will utilize Rs. 433.17 cr. for repayment/prepayment of certain borrowings, Rs. 64.00 cr. for capex on purchase of machinery and equipment, and the rest for inorganic growth as well as general corporate purposes.
The company has reserved equity shares worth Rs. 2 cr. (approx. 161290 equity shares at the upper cap) for its eligible employees and offering them a discount of Rs. 11 per share. From the rest, it has allocated not less than 75% for QIBs, not more than 15% for HNIs and not more than 10% for Retail investors.
The three Book Running Lead Managers (BRLMs) to this issue are JM Financial Ltd., IIFL Capital Services Ltd., and Kotak Mahindra Capital Co. Ltd., while KFin Technologies Ltd., is the registrar to the issue.
Having issued initial equity shares at par, the company has issued/converted further equity shares in the price range of Rs. 14.88 – Rs. 123.97 per share, between March 2015, and November 2025. The average cost of acquisition of shares by the promoters/selling stakeholders Rs. 1.18, Rs. 18.05, Rs. 29.11, Rs. 29.48, Rs. 30.60, Rs. 30.78, and Rs. 41.61 per share.
Post-IPO, its current paid-up equity capital of Rs. 616.62 cr. will stand enhanced to Rs. 670.65 cr. Based on the upper cap of the IPO price band, the company is looking for a market cap of Rs. 8316.06 cr.
FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit/ – (loss), of Rs. 840.54 cr. / Rs. – (108.73) cr. (FY23), Rs. 988.30 cr. / Rs. – (12.15 cr. (FY24), and Rs. 959.21 cr. / Rs. – (102.42) cr. (FY25). For H1 of FY26 ended on September 30, 2025, it posted a loss of Rs. – (16.68) cr. on a total income of Rs. 565.55 cr. The company marked steady growth in its top line, but posted losses for all the periods with inconsistency.
According to the management, while company kept posting positive cashflow at EBIDTA level, its aerospace business marked profits, while other divisions kept bleeding, overshadowing profits and continued to mark losses. The company enjoys most preferred partners for critical products in aerospace segment globally.
For the last three fiscals, the company has posted an average negative EPS of Rs. – (1.37) and an average negative RoNW of – (15.07) %. The issue is priced at a P/BV of 9.12 based on its NAV of Rs. 13.60 as of September 30, 2025, and at a P/BV of 5.01 based on its post-IPO NAV of Rs. 24.74 per share (at the upper cap).
If we attribute FY26 annualized earnings to its post-IPO fully diluted paid-up equity capital, then the asking price is at a negative P/E. Based on FY25 earnings also, the P/E stands negative. Thus, the issue appears negatively priced as far as its P/E is concern.
The company has reported PAT margins of – (13.48) % (FY23), – (1.48) % (FY24), – (11.07) % (FY25), – (3.16) % (H1-FY26), and RoCE margins of – (3.72) %, 2.84%, 0.87%, 1.81% respectively, for the reported periods.
DIVIDEND POLICY:
The company has not declared any dividends for the referred periods of the offer document. It has already adopted a dividend policy in May 2025, based on its financial performance and future prospects.
COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Azad Engineering, Unimech Aerospace, Amber Enterprises, Kaynes Techno, Dixon Techno, PTC Industries, as its listed peers. They are currently trading at a P/E of 95.8, 62.5, 113.0, 97.2, 68.5, and 433.0 (as of November 28, 2025). However, they are not truly comparable on an apple-to-apple basis. This comparison appears to be an eyewash.
MERCHANT BANKER’S TRACK RECORD:
The three BRLMs associated with the offer have handled 113 pubic issues in the past three fiscals, out of which 29 issues closed below the offer price on the listing date.
Conclusion / Investment Strategy
AL is engaged in the manufacturing of precision components primarily for aerospace segment. It is also engaged in the manufacturing of consumer electronics, plastics and consumer durables. Though its aerospace division is making profits, other business continuing to make losses. Based on its recent financial data, the issue is priced at a negative P/E. Considering its global customer lists, the company has bright prospects ahead. Well Informed/cash surplus investors may park moderate funds for long term.
Review By Dilip Davda on November 29, 2025
Review Author
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. My reviews do not cover GMP market and operators game plans. Readers must consult a qualified financial advisor before making any actual investment decisions, based the on information published here. With entry barriers, SEBI wants only well-informed investors to participate in such offers. With crazy listings in the recent past, SME IPOs drew the attention of investors across the board and lead to seer madness. However, as SME issues have entry barriers and continued low preference from the broking community, any reader taking decisions based on any information published here does so entirely at their own risk. The above information is based on information available as of date coupled with market perceptions. The Author has no plans to invest in this offer.
About Dilip Davda
Dilip Davda is veteran journalist associated with stock market since 1978. He is contributing to print and electronic media on stock markets/insurance/finance since 1985.
Dilip Davda is a leading reviewer of public issues and NCDs in the primary stock market in India. The knowledge he gained over 3 decades while working in the stock market and a strong relationship with popular lead managers makes his reviews unique. His detailed fundamental and financial analysis of companies coming up with IPOs helps investors in the primary stock market. Dilip Davda has a special interest in analyzing the SME companies and writing reviews about their public issues. His reviews are regularly published online and in news papers.
(Dilip Davda -SEBI registered Research Analyst-Mumbai,
Registration no. INH000003127 (Perpetual)
Email id: dilip_davda@rediffmail.com ).
Courtesy: https://www.chittorgarh.com/
