Aequs's Rs 921.81-Crore IPO Opens Today For Subscription— Should You Bid? Read Angel One's Report

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Angel One Report

Aequs Ltd. will launch it's initial public offering today, December 03 and the offer will close for subscription on Dec. 05.

The Bengaluru-based precision component manufacturer specialising in aerospace solutions has fixed the price band in the range of Rs 118 to Rs 124 per equity share.

Aequs is launching a Rs 921.81-crore IPO, comprising a Rs 670-corer fresh Issue and Rs 251.81-crore offer-for-sale.

The fresh issue proceeds will be utilised for debt repayment of Rs 433.17-crore, including investments into three wholly owned subsidiaries, for machinery capex of Rs 64-crore, and for funding inorganic growth, strategic initiatives, and general corporate purposes.

At the upper price band of Rs 124, Aequs is valued at 9.94× P/B as negative earnings make P/E irrelevant. The valuation reflects its integrated aerospace ecosystem, strong asset base and long cycle growth potential and a high barrier to entry business.

However, elevated leverage, continued losses and the fact that a majority of IPO proceeds will go toward debt repayment rather than expansion weigh on near term attractiveness.

Overall, the IPO is best viewed with a long term perspective and is therefore 'Subscribe with Caution' for long term investors.

JM Financial Ltd. is the book-running lead manager, while the issue registrar is Kfin Technologies Ltd.

Aequs shares will be listed on both the National Stock Exchange and the BSE on Dec. 10.

Key Risks

Aequs faces key risks from its high leverage and capital-intensive model, heavy dependence on a concentrated Aerospace customer base, long working-capital cycles, and strict certification-driven quality requirements, any disruption across these areas could materially impact cash flows, margins, and operational stability.

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