Aequs Ltd shares closed at ₹246.00 on the BSE, up 1.30% on Friday, after the board greenlit a significant capital infusion. The company approved a preferential issue of 2,80,71,690 warrants to Mellwood Trustee Services Private Limited, the trustee of the Melligeri Private Family Foundation, valued at approximately ₹650 crore. This isn’t just a balance sheet exercise; it’s a strategic bet on the precision manufacturing play.
The pricing mechanics are strict. Warrants are issued at ₹231.55, the floor price derived from Regulation 164 of SEBI’s SEBI Regulations, 2018. This figure is based on the higher of the 90-day and 10-day volume-weighted average prices prior to September 22, 2026. Crucially, the promoter group must pay ₹325 crore—50% of the total issue size—immediately upon allotment. That is double the regulatory minimum, signaling a deep pocket commitment before a single share is converted.
Why the urgency? Aravind Melligeri, Executive Chairman and CEO of Aequs, pointed to order wins outpacing internal planning. "We are winning programmes faster than we had planned for, and those wins need investment ahead of the revenue they bring," Melligeri stated. The proceeds will directly fund the expansion of the Hosur facility and investments in subsidiaries supporting aerospace and consumer electronics lines. The equity base added here is also intended to leverage term borrowings, a standard playbook for capital-intensive manufacturing scales.
On the ownership front, the math is clear. Full conversion of these warrants will lift the promoter and promoter group’s aggregate holding from 59.09% to 60.73%. The warrants carry an 18-month exercise window from allotment, but the conversion into equity must be completed by December 31, 2027. The promoter has signed an investment commitment letter dated September 25, 2026, guaranteeing the balance payment regardless of the share price at exercise. This locks in the promoter’s economic stake with the company’s long-term trajectory.
The next hurdle is shareholder approval. The issue is subject to statutory and regulatory clearances, meaning the capital won’t hit the books until the AGM or EGM ratifies the move. For traders, the immediate signal is the promoter’s willingness to pay a premium over the regulatory floor and lock in capital for a multi-year expansion cycle. The board has assessed the equity requirement through FY28 and decided to address it squarely through this issue, leaving room for a broader capital raise only if growth plans demand it later.