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Contract manufacturing firm Aequs, known for producing aerospace components and consumer durable goods, has initiated the process for an initial public offering (IPO) aiming to raise around USD 200 million. The firm has chosen the confidential pre-filing route to submit its Draft Red Herring Prospectus (DRHP) to SEBI and the stock exchanges. The IPO will consist of a fresh issue and an Offer for Sale (OFS). The company, which operates manufacturing hubs across India, France, and the USA, has attracted investment from major players like Amicus Capital and Catamaran. Kotak Mahindra Capital, JM Financial, and IIFL Capital are leading the offering.
Aequs, a contract manufacturer catering to the consumer durables and aerospace sectors, has taken the confidential pre-filing route to submit its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), with plans to raise approximately USD 200 million through an initial public offering. Advertisement
The proposed IPO will feature both a fresh issue of equity shares and an Offer For Sale (OFS) component. In a recent public communication, the company stated that it had confidentially pre-filed its DRHP with SEBI and the relevant stock exchanges, reflecting a growing trend among Indian companies seeking flexibility in their listing process.
Sources close to the matter indicated that the offering is targeted at USD 200 million, with Kotak Mahindra Capital, JM Financial, and IIFL Capital onboard as the book-running lead managers.
The board of Aequs had passed a resolution earlier to transition the firm from a private limited to a public company, a step that aligns with its IPO ambitions. Over time, the company has witnessed substantial promoter-led equity infusion, enabling operational expansion. It has also secured funding from a roster of marquee global investors including Amicus Capital, Amansa Capital, Steadview Capital, Catamaran (the family office of Infosys co-founder N R Narayana Murthy), Sparta Group, and the investment arm of entrepreneur Desh Deshpande.
Aequs operates a vertically integrated precision manufacturing ecosystem serving global customers in the aerospace and consumer sectors. The company maintains manufacturing facilities across India, France, and the United States, and has established industrial clusters in Karnataka's Belagavi, Hubballi, and Koppal to bolster supply chain efficiency.
Founder and CEO Aravind Melligeri, who co-founded Quest Global Engineering, brings decades of industry experience, particularly in aerospace manufacturing.
Financially, the company recorded a total income of approximately INR 988 crore in FY24, with an operating income of INR 970 crore.
Aequs's choice of the confidential pre-filing route allows it to delay public disclosure of IPO details, granting it more strategic control. This mechanism has increasingly been adopted by Indian companies, offering more time up to 18 months post-SEBI observations to decide on launching an IPO. Notably, this method permits changes of up to 50% in the primary issue size before the updated DRHP is filed.
This route has recently been utilised by companies such as Groww, Shiprocket, Tata Capital, PhysicsWallah, and Imagine Marketing (boAt's parent firm). In 2024, Swiggy and Vishal Mega Mart also moved forward using confidential filings. Although OYO used the route in 2023, it later withheld its public issue. Tata Play, which initiated the trend in late 2022, eventually chose not to proceed despite SEBI clearance.
Market analysts have remarked that this approach grants companies the flexibility to gauge market conditions without rushing into public listing timelines, a clear advantage over the traditional 12-month window.
The confidential filing, now becoming an increasingly popular pathway, reflects a broader industry shift towards adaptable IPO planning amidst evolving market conditions. Whether this translates into a successful listing remains to be seen, but Aequs is certainly making its move with calculated precision.
Source - PTI
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