The “Make in India” aerospace story just got a massive vote of confidence.
On Wednesday, Aequs, a precision engineering firm based in Belagavi, Karnataka, opened its initial public offering (IPO) to the public. Within hours, the “Subscribe” buttons across brokerage platforms were being hit hard. By midday, the issue was fully subscribed, driven by a massive retail frenzy.
But why is a company that manufactures landing gear components generating more buzz than some of the recent tech listings? The answer lies in the global aviation super-cycle and India’s rising stature in high-value manufacturing.
Here is a deep dive into the Aequs IPO, the numbers, and the strategic rationale behind the demand.
1. The Day 1 Frenzy: By the Numbers
It is rare to see a manufacturing IPO get swallowed up this quickly. As of 12:09 p.m. IST on Day 1, the statistics were telling a clear story of “Fear Of Missing Out” (FOMO):
Overall Subscription: 1.29x (Fully booked in hours).
Retail Investors: 5.3x (The small investor is betting big).
Total Issue Size: ₹922 Crore ($103 Million).
Valuation: ₹8,316 Crore (at the upper price band of ₹124).
The portion reserved for Non-Institutional Investors (NIIs) was also fully subscribed, signaling that High Net-Worth Individuals (HNIs) are just as bullish as the retail crowd.
2. The Core Thesis: Riding the Airbus & Boeing Backlog
Aequs isn’t just a generic parts manufacturer; they are integrated into the supply chains of the global duopoly: Airbus and Boeing.
Currently, the global aviation industry is sitting on a record backlog of jet orders. Airlines are desperate for new planes, and manufacturers are desperate for reliable supply chains.
Aequs supplies landing gear components for the Airbus A320 family (the workhorse of global aviation), the A350, and the Boeing 737 MAX.
90% of Aequs’ revenue comes from this aerospace vertical.
Investors are essentially betting that as Airbus and Boeing ramp up production to meet global demand, Aequs’ order book will swell in tandem.
3. Where is the Money Going? (Moving Up the Value Chain)
One of the most attractive aspects of this IPO is the structure of the raise.
Fresh Issue: ₹670 Crore.
Offer for Sale (OFS): ₹252 Crore.
The majority of the money is flowing into the company, not just into the pockets of exiting investors (though private equity firm Amicus Capital is making a partial exit).
The Game Plan: Aequs plans to use these funds to venture into the production of higher-value engine components. In the world of aerospace manufacturing, engine parts are complex, require higher certification standards, and typically command higher margins than structural components like landing gears. If Aequs successfully executes this pivot, their profitability per unit could see a significant re-rating.
4. The “China Plus One” Tailwind
Aequs is the classic beneficiary of the geopolitical shift in manufacturing. As global giants look to de-risk their supply chains away from China, India has emerged as a preferred destination for high-precision engineering.
Jefferies and other analysts have noted that for companies like Aequs, it is still “Day Zero.” The potential for shifting manufacturing volume from the West (or China) to India is massive, and Aequs has the first-mover advantage with established relationships.
5. What Should Investors Watch Out For?
While the demand is hot, investors should remain aware of the risks:
Client Concentration: Airbus is their largest customer. Any slowdown in Airbus production or a loss of that contract would be a significant blow.
The Consumer Business: About 10% of revenue comes from making toys and consumer electronics parts. While diversification is good, the valuation is being driven by the aerospace multiple. This segment needs to perform efficiently to avoid dragging down overall margins.
The Aequs IPO has struck a chord because it offers something the Indian market loves right now: Tangible Manufacturing Growth.
Unlike digital startups with vague paths to profitability, Aequs is a profitable, brick-and-mortar engineering firm plugged into a growing global sector. With the anchor book already raising ₹414 Crore from top domestic funds, and retail demand skyrocketing, the listing on December 10 is shaping up to be a headline event on Dalal Street.
