The Aequs initial public offering (IPO) attracted significant investor attention during the final bidding day, with a notable surge in demand across various segments. The company, specializing in precision engineering and aerospace manufacturing, aims to utilize the funds raised for expanding capacity, repaying debts, and general corporate use.
By 11:16 am, the IPO had garnered an overall subscription of 5.43 times. Retail investors led the subscriptions at 17.70 times, followed by non-institutional investors at 6.52 times, and employee-reserved category at 9.34 times. While Qualified Institutional Buyer (QIB) demand was at 0.67 times, it is expected to increase closer to the closing time, a typical trend for institutional bids on the final day.
The current grey market premium (GMP) for the Aequs IPO stands at approximately Rs 45.5, suggesting an estimated listing price of around Rs 169.5, indicating potential listing gains of about 36.69% over the upper end of the price band. However, GMP serves as an unofficial indicator, and actual gains will rely on market conditions and institutional demand at the listing time.
Aequs is a comprehensive manufacturing services provider specializing in precision engineering for the aerospace, automotive, and industrial sectors. Operating from a single Special Economic Zone (SEZ) in India, the company offers end-to-end services, including machining, forging, surface treatment, and assembly. With manufacturing units in India, the United States, and France, Aequs collaborates with major global Original Equipment Manufacturers (OEMs) like Airbus, Boeing, Safran Collins, and Spirit AeroSystems, establishing long-term partnerships that secure its position in a competitive industry.
The company intends to utilize the IPO proceeds to bolster its manufacturing capabilities, repay debts, and enhance its position in the global aerospace supply chain to capitalize on the increasing trend of outsourcing precision components.
Rajan Shinde, a Research Analyst at Mehta Equities Ltd, highlighted the unique opportunity that the Aequs IPO presents to investors in India’s advanced aerospace precision manufacturing sector. Despite varied financial performance in recent years, with revenue growth and declines in different fiscal years, Aequs maintains positive momentum in its core aerospace segment. Shinde recommended a long-term perspective for investors looking to subscribe to the IPO, emphasizing Aequs’ strong customer relationships, diversified product portfolio, and strategic joint ventures with renowned global partners.
The IPO aims for a market capitalization of Rs 8,316 crore at the upper end of the price band, translating to a price-to-book value of approximately 5.7 times. Shinde believes this valuation is reasonable compared to industry peers trading at around 10 times, citing Aequs’ solid fundamentals and growth potential in the aerospace components sector. He underlined the company’s capacity to leverage its aerospace expertise for consumer products and capitalize on the global outsourcing trend, recommending investors to consider subscribing with a long-term outlook.