Aequs Approves ₹650 Crore Promoter Group Warrant Issue, Awaits Shareholder Nod

Aequs Limited has cleared a preferential warrant issue of approximately ₹650 crore to a Promoter Group entity, with the transaction now awaiting shareholder and other required approvals.

Preferential issue to Promoter Group entity

The Belagavi-based engineering-led, vertically integrated precision manufacturer has approved the issue of up to 2,80,71,690 warrants.

Each warrant will be convertible into one fully paid-up equity share of face value ₹10.

The warrants are proposed to be issued to Mellwood Trustee Services Private Limited, Trustee of the Melligeri Private Family Foundation, which is a member of the Promoter Group.

The proposed issue will aggregate to approximately ₹650 crore.

The company said on Friday evening that the issue is subject to shareholders’ approval and such other statutory and regulatory approvals as may be required.

Of the total issue size of approximately ₹650 crore, ₹325 crore will be payable upfront upon allotment of the warrants.

That upfront payment represents 50% of the issue size and is twice the regulatory minimum, according to the company.

The balance amount will be payable when the warrants are exercised.

Exercise timeline and conversion

In accordance with applicable regulations, the warrants may be exercised within 18 months from the date of allotment, according to a company communique.

The company also said the conversion of warrants into equity shares, by making payment of the balance consideration, shall take place on or before December 31, 2027.

The promoter has undertaken to pay the balance consideration in full, irrespective of the market price of the company’s shares at the time of exercise.

Aequs said it has received an investment commitment letter dated September 25, 2026, from the promoter to this effect.

The issue price of ₹231.55 is the floor price determined under Regulation 164 of the SEBI Regulations, 2018.

The company said this price is the higher of the 90-trading-day and the 10-trading-day volume weighted average price of its shares preceding the relevant date of September 22, 2026.

On full conversion of the warrants, the aggregate holding of the Promoter and Promoter Group in Aequs will increase from 59.09 per cent to 60.73 per cent.

Funding growth across aerospace and consumer businesses

According to the company, the investment comes at an important point in Aequs’ growth journey.

Aequs said it is advancing multiple opportunities across its aerospace and consumer businesses.

The company said these opportunities require investment ahead of the revenue and cash they generate.

The proceeds from the issue will fund capacity expansion across the aerospace and consumer businesses.

This includes the development of the Hosur facility.

The proceeds will also be used for investment in subsidiaries and joint ventures supporting that expansion, and for general corporate purposes.

The equity will provide the base against which the company raises its term borrowings for the expansion.

The Board has assessed the company’s current equity requirement through FY28 and has decided to meet it through this issue.

A broader capital raise will be considered as and when required by the company’s growth plans, the company further said.

Aravind Melligeri, Executive Chairman & CEO, Aequs Limited, said: “We are winning programmes faster than we had planned for, and those wins need investment ahead of the revenue they bring.”

Source: The Hindu