Aequs, the Karnataka-based precision manufacturer that supplies parts to Airbus, Boeing and Collins Aerospace, will raise about ₹650 crore from its own promoter group, a move the company says will fund capacity ahead of demand across its aerospace and consumer businesses.
In a filing with the stock exchanges on Friday, the company said its board had approved a preferential issue of up to 2,80,71,690 warrants to Mellwood Trustee Services Private Limited, trustee of the Melligeri Private Family Foundation, which is part of the promoter group. Each warrant is convertible into one fully paid-up equity share with a face value of ₹10. The warrants are priced at ₹231.55 each, the floor price determined under Regulation 164 of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The promoter foundation will pay ₹325 crore, or 50% of the issue, upfront when the warrants are allotted. That is twice the 25% minimum required under SEBI rules. The balance becomes payable when the warrants are exercised, which can happen within 18 months of allotment. The company said conversion and payment of the remaining consideration will take place on or before December 31, 2027. The issue still requires shareholder approval and other regulatory consents.
Why promoters are paying more than they need to
Warrant issues to promoters are common in Indian capital markets, but the structure of the Aequs deal stands out. Promoters typically pay the regulatory minimum upfront and retain flexibility over the rest. By committing half the money at allotment, the Melligeri family is putting significant cash into the business immediately and signalling that it does not expect to walk away from the balance.
Aravind Melligeri, who founded Aequs in 2006 and serves as executive chairman and chief executive, framed the raise in terms of order momentum. "We are winning programmes faster than we had planned for, and those wins need investment ahead of the revenue they bring," he said. "This issue gives Aequs committed capital to build that capacity and the equity base to support the borrowing that goes with it. The Promoter Group is subscribing at the price as per the SEBI pricing formula and paying half of it upfront — that is the measure of our confidence in what this business can deliver."
On full conversion, the promoter and promoter group's aggregate holding will rise from 59.09% to 60.73%. The dilution for public shareholders is therefore modest. Shares of Aequs closed at ₹246.00 on the BSE on Friday, up ₹3.15 or 1.30%. The warrant price of ₹231.55 sits about 6% below that close, reflecting the SEBI formula, which is based on historical trading prices rather than the latest quote.
Where the money goes
According to the company's disclosures reported by Inc42, the proceeds will be used to expand capacity across the aerospace and consumer businesses, to develop the Hosur facility, and to invest in subsidiaries and joint ventures. Aequs said the raise is intended to meet its equity requirements through FY28 and to support future term borrowings, reducing the need to return to the market in the near term.
The Hosur facility in Tamil Nadu sits at the centre of Aequs's plan to build an aerospace engine component ecosystem in India. The company expects the facility to become operational next year, with shipments likely to begin by 2028. Engine components are among the most demanding parts of the aerospace supply chain, requiring specialised machining of high-end alloys, long qualification cycles and close collaboration with original equipment manufacturers.
The company's existing aerospace operations are concentrated in a vertically integrated special economic zone in Belagavi, Karnataka, which brings forging, machining and surface treatment under one roof. That integration is a large part of Aequs's pitch to global customers seeking to diversify supply away from established hubs.
