Aequs IPO Signals Big-Budget Expansion: RHP Highlights Capex Push, High Aerospace Dependence and Customer Concentration Risks Ahead of December 3 Launch

Mumbai | December 1 – Aequs Ltd, one of India’s largest vertically integrated aerospace component manufacturers, is set to open its ₹921.81-crore initial public offering (IPO) on December 3, marking one of the most closely watched listings in the precision manufacturing segment this year. The DRHP reveals a company preparing for an aggressive expansion cycle, supported by a sizeable capital expenditure plan, even as it remains exposed to sector concentration risk and a high-dependence customer profile.

The Belagavi-based company, which has built its identity around a fully integrated Special Economic Zone (SEZ) dedicated to aerospace manufacturing, offers an end-to-end stack ranging from machining and forging to surface treatment and final assemblies. It is one of the few domestic manufacturers capable of providing complete “one-stop-shop” solutions to global OEMs like Airbus, Boeing, Safran, Spirit Aerosystems, Eaton and Collins Aerospace.

IPO structure and valuation

According to the Red Herring Prospectus, the issue comprises a ₹670-crore fresh issue and an offer-for-sale of shares worth ₹251.81 crore, taking the total IPO size to ₹921.81 crore. Aequs has set the price band at ₹118–₹124 per share, valuing the company at over ₹8,300 crore at the upper end. Retail investors will need a minimum outlay of ₹14,880 for a single lot of 120 shares.

The IPO will be open from December 3 to 5, with allotment expected on December 8, demat credit on December 9 and listing on both the BSE and NSE on December 10.

Aerospace still the revenue engine bringing both strength and vulnerability

Aequs’ aerospace business contributed 88.23% of net external revenue in the six months ended September 2025, underscoring the company’s deep integration into global aerospace supply chains. While this positions Aequs as a key beneficiary of the global commercial aviation upcycle, it also amplifies vulnerability to sector-specific slowdowns, OEM order cuts and cyclical demand shocks.

The company’s customer mix highlights this risk. The top ten clients accounted for 82.51% of revenue in H1 FY26, while the top five alone contributed 66.36%. The loss of any major client—or even a temporary production adjustment—could materially affect cash flows, the DRHP warns. One such example is Hasbro, whose revenue contribution fell sharply from 17.63% in FY23 to 4.63% in September 2025, reflecting the inherent volatility in the consumer segment.

Financial performance:

The company attributes the fluctuations to operational ramp-ups, capacity utilisation gaps, particularly in its U.S. aerospace facility, which remains only 14-15% utilised and the impact of a slowing consumer segment, where capacity utilisation fell to 17.07% in FY25.

Where the IPO money will go: A clear capex-heavy roadmap

The DRHP lays out a forward-looking deployment plan, signalling Aequs’ intent to scale aggressively across manufacturing and global operations.

A sizeable portion of the fresh issue ₹433.16 crore will be used for repayment of borrowings, improving the company’s leverage position ahead of further expansion. Another ₹64 crore is earmarked for capital expenditure, particularly the purchase of precision machinery to enhance manufacturing capabilities.

The remaining proceeds will be channelled towards inorganic growth and general corporate purposes, including potential acquisitions. Aequs’ three manufacturing ecosystems- Belagavi (aerospace), Hubballi (consumer electronics and durables) and Koppal (plastics) are poised to benefit from the capital infusion.

Global footprint and long-term opportunity

Aequs’ presence across India, France and the United States gives it a strategic advantage in serving global aerospace OEMs with short supply times and proximity-driven efficiency. As of September 2025, India accounted for 75.60% of aerospace revenue, followed by the U.S. at 12.74% and France at 11.66%.

Its product portfolio spans more than 5,000 individual components, including landing systems, cargo interiors, engine components and structural assemblies—one of the largest in India’s aerospace manufacturing landscape. Most of its key customers have been associated with the company for over a decade, with Aequs frequently receiving industry recognitions including multiple Airbus Detailed Parts Partner (D2P) awards.

Risks remain significant despite expansion potential

While Aequs’ integrated manufacturing model and global reach give it a strong competitive moat, investors must note several structural risks:

• Heavy dependence on aerospace revenue, making results vulnerable to sector cycles
• High customer concentration with over 80% revenue tied to the top ten clients
• Low capacity utilisation in certain segments, which could pressure margins
• No minimum order commitments from OEM customers, adding volatility to demand planning

These risks, alongside Aequs’ loss-making status, are expected to play a key role in investor sentiment.

Grey market signals optimism ahead of listing

The grey market premium (GMP) for Aequs has been inching upward, currently hovering around ₹43-44 per share, implying a potential 35% listing premium over the upper price band. The participation of marquee investors such as Amicus Capital, Amansa Capital, Catamaran (N. R. Narayana Murthy’s family office) and Sparta Group further strengthens early confidence.

Investor outlook

Aequs IPO arrives at a critical moment for India’s precision manufacturing and aerospace supply chain. With global OEMs increasingly localising production and expanding sourcing out of India, the company stands well-positioned to ride the structural upcycle.

However, the company’s heavy reliance on a cyclical sector, persistent losses, and concentrated customer exposure make this offer more suitable for investors with a higher risk appetite and a long-term investment horizon.