Aequs Plans ₹1,700 Crore IPO to Fuel Expansion Amid Strong Aerospace Order Book
- Aequs is in aggressive expansion mode, supported by a healthy seven-year aerospace order book and growing partnerships with global OEMs.
- The company plans to raise about ₹1,700 crore through an IPO to fund capacity additions and capitalise on India’s rising aerospace manufacturing share.
- With 80% of its revenue from aerospace, Aequs continues to strengthen its fully integrated precision manufacturing ecosystem, despite supply chain hurdles.
The Paris Airshow is like the Mecca of aviation for many companies, both civil and military. For Aequs, it is a confluence of its customers and prospective customers, and the company has had a good outing at the 55th edition of the mega aviation event. Aequs, which has its main operations in India and also in France and the USA, is said to have struck a few deals which it said it would announce after vetting by its legal team.
At Le Bourget, it reinforced its partnership with Airbus, Safran, Collins Aerospace, and Magellan Aerospace, among others. The facility in France is into a niche segment, working on engine components and landing gear components. Aequs France makes the A320 main fitting nose landing gear, its machining and assembly, having a 40% market share. “We also make LEAP products, the landing gear for the Rafale and the Falcon executive jets. It is an operation where we are growing, having an overall market share of 10%,” said the Executive Chairman and CEO of Aequs, Arvind Melligeri, who led the charge at the Paris Airshow.
IPO in the pipeline
The company, he announced, is in an expansion mode, considering that the aviation sector has been growing at a healthy pace and that India has demonstrated its capabilities in aerospace manufacturing. Aequs, which has established a major special economic zone in Belagavi, Karnataka, is a catalyst of sorts. India is now a key player in the global supply chain. “The aerospace ecosystem here has delivered to the customers. It is now for OEMs and Tier I suppliers to take a closer look at India and do more. Currently, India holds a small percentage of the global sourcing market, but it already has a 5% market share in aerospace, which is expected to reach 10% soon. There is no reason why we cannot get to 10% in terms of sourcing capacity out of India. We want to be in the forefront,” Melligeri said and added that the initial public offering (IPO) of about ₹ 1,700 crores, which is in the pipeline, will be funding the expansion.
Sound Order Book
Aequs is sitting on a good order book that runs up to seven years. “We keep adding capacity across all our businesses. Our consumer business, which presently has a low base, is fast expanding. Aerospace business, which accounts for 80% of our overall business, is growing by 20% to 30%.” This is notwithstanding the supply chain disruptions that continue to impact aviation delivery schedules. Aequs is the only precision component manufacturer operating within a single special economic zone in India, offering fully vertically integrated manufacturing capabilities that help it deal with supply chain issues. It is not that it has overcome the problem, but rather that it has been managing it, considering that sourcing Titanium and aviation-specific grade steel for aviation components remains a challenge.
Melligeri claims that, from forging to machining to surface treatment to assembly, everything is done within a single ecosystem, enabling the company to complete all these processes within a radius of 500 metres. “I can finish the job and send it to the customers. Nobody else has this kind of unique value proposition.”
The world is gradually looking at India for aerospace related work, thanks to companies such as Aequs, which dared to set up a facility in a back of beyond place in Karnataka. Aequs showed to the powers that be in India that the manufacturing ecosystem can be sustainable, away from cities such as Bengaluru. Melligeri believes that the aerospace industrial ecosystem has to first find a common ground in civil and defence aerospace, and it could be in the realm of engines, landing gear and actuation systems. India has enormous engineering talent, and with the right training and development path for them, the aviation sector can get catapulted, leveraging the vast engineering talent.
Recently, Aequs and Magellan Aerospace Corporation joined hands to explore the development of a business plan for setting up a 50/50 jointly-owned aerospace sand casting facility situated at the Belagavi Aerospace Cluster (BAC), in Karnataka. The proposed facility aims to meet the sand casting demands in the growing aerospace industry, particularly in Southeast Asia.
Aequs decision to go public comes after a strong year of growth and operational efficiency. The company reported a 19% growth in operating revenue at ₹ 965 crore in FY2024 compared to ₹ 812 crore in FY2023. More importantly, the company reduced its net loss by 87% to INR 14.2 crore. In manufacturing to achieve scale, one needs to keep investing in capital and Aequs is not shying away from making not just investments, but diversifying its business with about 20% in consumer goods and toys manufacturing. The aerospace segment dominates, accounting for 80% of its business income, thanks to its strengths in precision machining for aerosystems, aerostructures, landing gear and engine components etc. It is said that every airliner will have some part made in Belagavi, and that indeed warms the cockles of one’s heart.
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