Aequs Ltd, a contract manufacturing firm that deals in manufacturing consumer durable goods and aerospace parts, has managed to conclude a pre-Initial Public Offering (IPO) funding round, which raised around ₹144 crore through key institutional investors. The participants in the funding are SBI Funds Management, DSP India Fund, and Think India Opportunities Fund.

Pre-IPO Transaction

On Tuesday, November 11th, the funding was announced. Under this pre-IPO deal, Aequs distributed a total of 11,615,713 equity shares to the investing entities. This is an allocation that provides the investors with a collective interest of 1.88% in Aequs Ltd.

The share of equity was distributed to the participating funds as follows: two entities of SBI Funds Management were allotted, and DSP India Fund and Think Opportunities Master Fund were allotted each. This investment indicates that the institutional trust in the business model of Aequs, which includes both consumer durable goods and the specialized aerospace parts sectors, is rather high.

Contract manufacturing and impact

The successful completion of this pre-IPO round directly influences the magnitude and configuration of the future IPO of Aequs. Before this transaction, the company had estimated the fresh issue portion of the IPO to be approximately ₹720 crore. The new issue portion of the main IPO will also be decreased correspondingly to the ₹144 crore increase in the pre-IPO round.

The intended fresh issue size in the IPO will now be reduced to about 576 crore, compared to the initial target of ₹720 crore. This procedure is usually an indication that the company has bought part of the necessary capital at an opportune valuation, streamlining the ultimate size of the offering to the public market.

Aequs Ltd is a business firm that functions in the competitive arena of contract manufacturing, and it has a special dual concentration on two distinct segments of the market. Consumer Durable Goods deals with the production of durable products in the consumer market.

Aerospace Parts are used, and have high quality and strict regulations required in the manufacturing of components utilized in the aerospace industry. The perceived value and growth prospects in its various contract manufacturing businesses are demonstrated by the fact that the company has been able to secure substantial investment by some of the largest investment funds in the country, such as SBI Funds, DSP India Fund, and Think India Opportunities Fund.

Conclusion

Aequs Ltd has already raised a major pre-IPO investment, with an estimated ₹144 crore being raised by major financial institutions and including SBI Funds Management, DSP India Fund, and Think India Opportunities Fund. The investment was made by the issuance of 11,615,713 equity shares, which gave the investors a 1.88% stake. This pre-IPO investment resulted in the intended fresh issue size of the main IPO of the company being reduced to approximately ₹576 crore as compared to the earlier ₹720 crore. The effective fundraising increases institutional confidence in the prospects of the Aequs contract manufacturing business that cuts across the crucial consumer durable goods and high-value aerospace parts.