Transaction Details

The Board of Directors of Aequs Limited has 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), a member of the Promoter Group. Each warrant is convertible into one fully paid-up equity share of face value ₹10, aggregating to approximately ₹650 crore.

Financial Terms

  • Issue Size: ₹650 crore
  • Upfront Payment: ₹325 crore (50% of issue size, twice the regulatory minimum) payable upon allotment of warrants
  • Balance Payment: Remaining ₹325 crore payable upon exercise of warrants
  • Exercise Period: Warrants may be exercised within 18 months from date of allotment
  • Conversion Deadline: Conversion must occur on or before December 31, 2027
  • Issue Price: ₹231.55 per warrant (determined as floor price under SEBI Regulation 164)
  • Pricing Basis: Higher of the 90-trading-day and 10-trading-day volume weighted average price preceding September 22, 2026

Ownership Impact

Upon full conversion of the warrants, the aggregate holding of the Promoter and Promoter Group in the Company will increase from 59.09% to 60.73%.

Use of Proceeds

The proceeds from this equity infusion will be utilized for:

  • Funding capacity expansion across aerospace and consumer businesses
  • Development of the Hosur facility
  • Investment in subsidiaries and joint ventures supporting the expansion
  • General corporate purposes
  • Providing equity base to support term borrowings for expansion

The Board has assessed the Company's current equity requirement through FY28 and decided to meet it through this issue. A broader capital raise will be considered as needed by the Company's growth plans.

Strategic Context

The investment comes at a critical growth phase for Aequs as the Company advances multiple opportunities across its aerospace and consumer businesses. These opportunities require investment ahead of the revenue and cash they generate. The promoter group's commitment demonstrates alignment with the Company's long-term growth plans and capital requirements.

Management Commentary

Aravind Melligeri, Executive Chairman & CEO, stated: "We are winning programmes faster than we had planned for, and those wins need investment ahead of the revenue they bring. 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 SEBI pricing formula and paying half of it upfront — that is the measure of our confidence in what this business can deliver."

Approval Process

The issue is subject to shareholders' approval and other statutory and regulatory approvals. An Extraordinary General Meeting is scheduled for Thursday, October 22, 2026, through video conferencing to seek shareholders' approval. The Company has received an investment commitment letter dated September 25, 2026, from the Promoter.

Company Background

Aequs Limited is an engineering-led, vertically integrated precision manufacturer operating within a single SEZ in India, with operations across aerospace and consumer segments. The Company operates a unique ecosystem with co-located capabilities spanning forging, precision machining, surface treatment, and assembly.

Business Segments

  • Aerospace: Among India's largest precision component manufacturers with 5,740 qualified parts across engine systems, structures, actuation systems, landing systems, and assemblies. Tier-1 supplier to Airbus, Boeing, Safran, and Collins Aerospace.
  • Consumer: Diversified manufacturing ecosystem spanning consumer electronics, plastics, toys, and consumer durables, serving leading global brands.

Operational Capacity

  • Manufacturing Clusters: Belagavi, Hubballi, and Koppal (Karnataka)
  • International Operations: United States and France
  • Annual Capacity: Approximately 4.78 million machining and molding hours per annum (based on Q1FY27 annualized figures)