Aequs IPO Listing: Airplane parts maker Aequs Ltd saw a strong start on the D-street on December 10, with its shares listing at a premium of 12.90 per cent. On both the NSE and BSE, the stock opened at Rs 140 per share, up by Rs 16 or 12.90 per cent from the upper end of issue price.
In the unlisted market, Aequs was quoting a grey market premium (GMP) of about Rs 24 per share ahead of its debut, indicating expectations of a strong start. However, the actual listing premium came in lower than the grey market indication.
Through its initial public offering (IPO), Aequs Ltd raised Rs 921.81 crore via a combination of fresh equity and an offer for sale. The issue comprised a fresh issue of 5.40 crore shares amounting to Rs 670 crore, and an offer-for-sale of 2.03 crore shares worth Rs 251.81 crore.
JM Financial, IIFL Capital Services, and Kotak Mahindra Capital were the book running lead managers, and KFin Technologies was the registrar to the issue.
Aequs Limited is a precision manufacturing company focused on the aerospace sector. It makes components for engine and landing systems, cargo and cabin interiors, and also works on structures, assemblies and turning solutions for global aerospace companies.
How Much Investors Made
In its IPO the company offered its shares with a price band of Rs 118 to 124 apiece. The Aequs Ltd IPO was open for subscription from December 3 to December 5.
The minimum lot size for the issue was 120 shares. Accordingly, a retail investor applying for the IPO would have invested a minimum of Rs 14,880 at the upper end of the price band. On this investment, retail investors, if they booked profits at the opening price, would have made a gain of about Rs 1,920 per lot.
The issue also carried a reservation of up to 1.77 lakh shares for employees, who were offered stock at a discount of Rs 11 to the issue price. This gave employees an immediate gain of about 23.9 per cent at the open, translating to a profit of roughly Rs 3,240 per lot.
Aequs IPO Objectives
Aequs plans to use a significant chunk of the Rs 670-crore net proceeds from the IPO to cut debt and and support capital expenditure across the company and its subsidiaries. According to its red herring prospectus (RHP), the company will allocate around Rs 433 crore for repayment or prepayment of borrowings, including loans taken by three wholly owned subsidiaries — AeroStructures Manufacturing India Pvt Ltd, Aequs Consumer Products Pvt Ltd, and Aequs Engineered Plastics Pvt Ltd.
Of this, Rs 17.55 crore will go towards the parent company, while about Rs 415.62 crore is proposed to be infused into the subsidiaries. Within that, around Rs 174.82 crore will go to AeroStructures Manufacturing India, Rs 231.16 crore to Aequs Consumer Products and Rs 9.63 crore to Aequs Engineered Plastics.
Another Rs 8.11 crore is allocated for machinery and equipment purchases at the company level, and Rs 55.89 crore for similar capital expenditure at AeroStructures Manufacturing India. The remaining funds will be deployed towards inorganic growth, potential acquisitions, other strategic initiatives, and general corporate purposes.
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