Aequs IPO EXPLODES on Day 1! Retail Investors Rush In – Will This Be a HUGE Listing?

Aequs' initial public offering (IPO) witnessed massive investor interest on its opening day, December 3. The precision component maker's ₹921.81 crore issue was fully subscribed in less than three hours, driven primarily by strong demand from retail investors.

Subscription Frenzy on Day One

• The Aequs IPO, open for subscription from December 3 to December 5, saw its book fully covered within hours of opening.
• As of 12:55 PM on Wednesday, the total issue was subscribed 1.59 times, indicating robust investor appetite.
• The price band for the Aequs IPO is set between ₹118 and ₹124 per share.

Retail Investors Lead the Charge

• Retail individual investors showed exceptional enthusiasm, oversubscribing their allocated portion by a significant 6.42 times.
• Non-Institutional Investors (NIIs) also participated strongly, with their segment subscribed 1.45 times.
• Demand from Qualified Institutional Buyers (QIBs) was comparatively subdued on the first day, with bids for 36,480 shares against an allotment of 2,26,10,608 shares.

Positive Grey Market Signals

• The positive investor sentiment is further reflected in the grey market.
• Aequs shares were reportedly trading at approximately ₹171 in the unofficial market.
• This translates to a Grey Market Premium (GMP) of ₹47 per share, a premium of about 37.90% over the upper price band of ₹124.

Brokerage Recommendations

• Leading financial institutions have issued positive recommendations for the Aequs IPO.
• Arihant Capital advised investors to subscribe for potential listing gains.
• SBI Securities also suggested subscribing at the cut-off price, underlining confidence in the issue.

IPO Structure and Lot Size

• The Aequs IPO is a book-built offering valued at ₹921.81 crore.
• It comprises a fresh issue of 54 million shares aggregating ₹670 crore and an Offer for Sale (OFS) of 20.3 million shares worth ₹251.81 crore.
• The minimum lot size for retail applicants is 120 shares, requiring an investment of ₹14,880.
• The subscription period will conclude on Friday, December 5.
• Share allotment is expected by December 8, 2025, with listing on BSE and NSE anticipated on December 10, 2025.

Use of Proceeds

• Proceeds from the fresh issue are earmarked for repaying outstanding borrowings and prepayment penalties for the company and its wholly-owned subsidiaries.
• Funds will also be utilized for capital expenditure to purchase machinery and equipment for Aequs and AeroStructures Manufacturing India Private Limited.
• A portion is allocated for inorganic growth through acquisitions, strategic initiatives, and general corporate purposes.

Impact

• The strong subscription levels, especially from retail investors, suggest significant market interest in Aequs, potentially leading to a positive debut on the stock exchanges.
• A successful IPO could boost investor confidence in the precision components sector and provide Aequs with the necessary capital for expansion and debt reduction.
• The grey market premium indicates that investors expect a substantial listing gain, which could attract more participation in future IPOs.
• Impact Rating: 8

Difficult Terms Explained

• IPO (Initial Public Offering): The process where a private company offers its shares to the public for the first time to raise capital.
• Oversubscribed: When the demand for shares in an IPO exceeds the number of shares offered.
• Retail Investors: Individual investors who trade smaller amounts of securities.
• Non-Institutional Investors (NIIs): Investors who are not institutional investors (like mutual funds or banks) and bid for amounts above a certain threshold (often over ₹2 lakhs in India).
• Qualified Institutional Buyers (QIBs): Large institutional investors like mutual funds, foreign institutional investors, and pension funds, who typically invest significant amounts.
• Grey Market Premium (GMP): The unofficial premium at which an IPO's shares are traded in the grey market before listing. It indicates market sentiment.
• Book-built Offering: A method of IPO pricing where the demand for shares is gauged through a bidding process, allowing for price discovery.
• Offer for Sale (OFS): A portion of an IPO where existing shareholders sell their shares, and the proceeds go to them, not the company.
• Listing: The process of a company's shares being admitted for trading on a stock exchange.