Aequs IPO Review: Attractive Valuation or Risky Bet — A Retail Investor’s Guide
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Key Takeaways
- Aequs operates a unique aerospace-focused SEZ with vertically integrated manufacturing.
- The company is loss-making with negative ROE and ROCE, increasing risk.
- Valuation is cheaper vs niche peers on Price-to-Book, but P/E is highly negative.
- IPO proceeds largely go toward debt repayment, not expansion.
- Suitable only for high-risk, long-term investors looking to play the aerospace theme.
India’s aerospace and defence manufacturing ecosystem is strengthening with Make in India, rising localisation, and global export demand. Aequs Ltd., a vertically integrated aerospace components manufacturer, is tapping the capital markets with a ₹921.81 crore IPO.
However, with volatile financials and dependence on debt, is the IPO attractive or too risky?
This detailed review covers financials, valuation, strengths, risks, and industry comparison.
Aequs IPO Details
- Issue Opens: December 3, 2025
- Issue Closes: December 5, 2025
- Total Issue Size: ₹921.81 crore
- Fresh Issue: ₹670 crore
- Offer for Sale: ₹251.81 crore
- Price Band: ₹118–₹124
- Market Lot: 120 shares
- Estimated Market Cap: ₹8,316.06 crore
- Listing: NSE & BSE
Issue Allocation
- QIBs: 75%
- NIIs: 15%
- Retail: 10%
Use of Funds
- Repayment/prepayment of borrowings
- Investments into three wholly owned subsidiaries
- Machinery & equipment capex
Note: Majority of funds focus on debt reduction, not growth.
Company Overview: What Does Aequs Do?
Founded in 2000, Aequs Ltd. operates a dedicated aerospace SEZ, one of the few integrated ecosystems in India.
Aerospace Product Portfolio
- Structures: brackets, fittings, floorboards
- Cargo & Interiors: panels, trays, seat components
- Landing Systems: landing gear brackets, rims, wheel assemblies
- Actuation Systems: manifolds, housings, pistons
Aequs also leverages its precision engineering capabilities to serve consumer electronics, plastics, and durables, with manufacturing across three continents, offering proximity to global OEMs.
Financial Performance: Three-Year Snapshot
(All values from restated consolidated statements)
Revenue
- FY23: ₹812.1 crore
- FY24: ₹965 crore
- FY25: ₹924.6 crore
Insight: Revenue rose sharply in FY24 but dipped slightly in FY25.
Profitability
- Net Profit FY23: –₹109.50 crore
- Net Profit FY24: –₹14.24 crore
- Net Profit FY25: –₹102.35 crore
Margins temporarily improved but slipped again.
EBITDA Margin
- FY23: 7.77%
- FY24: 15.08%
- FY25: 11.68%
Key Ratios (FY25)
- ROCE: 0.87%
- EPS: –₹1.80
- P/E: –74.71×
- RoNW: –14.47%
Net Worth
- FY23: ₹251.91 crore
- FY24: ₹807.17 crore
- FY25: ₹707.53 crore
FY24 saw a restructuring-led jump, followed by erosion in FY25Interpretation
- Aequs is loss-making, unlike all comparable peers.
- On P/B (~9.9x), it is cheaper than several precision engineering stocks trading at 15–20x P/B.
Key Strengths
- Vertically integrated precision manufacturing ecosystem
- Production spread across multiple continents
- Strong relationships with global aerospace OEMs
- Deep engineering capability across key aerospace systems
- High entry barriers due to specialised infrastructure
Key Risks & Concerns
- All major manufacturing operations based in Karnataka
- Negative operating cash flows
- Heavy dependence on global aerospace cycles
- Persistent losses and negative return ratios
- IPO proceeds primarily for deleveraging, not growth
Strategic Roadmap
Aequs aims to:
- Deepen aerospace client engagement
- Expand consumer product categories
- Improve margins through higher-value manufacturing
- Leverage capabilities to enter adjacent sectors
Execution risk remains high due to financial volatility.
Valuation & Analyst Outlook: Subscribe or Avoid?
Positives
- Unique aerospace SEZ ecosystem
- Sticky client relationships
- Cheaper than peers on Price-to-Book
- Aligned with India’s aerospace manufacturing push
Negatives
- Loss-making for three consecutive years
- High debt, low profitability
- Poor short-term visibility
- Only 10% retail quota, limiting listing momentum
Analyst View
- A unique, high-barrier entry into the aerospace & defense supply chain.
- The company is currently loss-making with negative return ratios
- The majority of IPO proceeds will be used to pay off debt, not for new expansion.
- Priced significantly lower than peers on a Price-to-Book basis (~9.9x vs peers at 15-20x).
- Aggressive investors can park some money for the long term to play niche theme.
FAQs
- Is Aequs IPO good for retail investors?
Suitable only for high-risk investors with long-term horizons. - What is the price band for the Aequs IPO?
₹118–₹124 per share. - How will the IPO proceeds be used?
Mainly debt repayment, subsidiary investments, and machinery capex. - Is Aequs profitable?
No. Aequs has reported losses in FY23, FY24, and FY25. - How does Aequs compare with peers?
Peers are profitable with high P/E valuations; Aequs is loss-making but cheaper on P/B.
Conclusion
The Aequs IPO offers a rare aerospace SEZ ecosystem but comes with high financial risk. While long-term structural opportunity exists, persistent losses, negative returns, and debt dependence make the IPO suitable only for risk-tolerant investors.
For those looking to invest with expert-backed research and a trusted experience, Swastika Investmart offers a SEBI-registered platform with strong tools and support.
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