The Board of Directors of Aequs has formally approved a special issuance of up to 2,80,71,690 warrants to Mellwood Trustee Services, the Trustee of the Melligeri Private Family Foundation. It is a member of the Promoter Group and a member of the Promoter Structure. Every convertible warrant granted pursuant to this preferential allotment shall be convertible into one fully paid equity share of the Company, with each equity share valued at ₹10. The final transaction aggregate value is approximately ₹650 crore. The whole execution of this issue shall be subject to obtaining the requisite approvals from the shareholders of the company and additional statutory and regulatory approvals as may be required under any applicable laws by the company.

Payment mechanics and impact on shareholding pattern

Of the total, ₹325 crore is to be paid upfront at the time of allotment of the warrants, while the remaining amount is to be repaid based on the actual redemption proceeds. This first offering is precisely half of the total issue size, which is double the regulatory minimum requirement for such transactions. 

The unsubscribed amount shall be due and payable to the subscriber when the warrants are actually exercised. As per the provisions of this rule, these warrants can be redeemed within the period of 18 months from the date of official allotment. The warrants are to be converted to the respective number of equity shares on or before 31 December 2027, subject to payment of the balance consideration. 

The Promoter has specifically agreed to pay this outstanding amount with consideration, without regard to the market value of the Company’s securities on the day of exercise. This commitment has been formalized with the receipt by the Company of a fixed and binding letter of investment commitment dated 25 September 2026 directly from the Promoter.

The definitive conversion of these warrants will involve a significant re-listing of the shareholders of the company. The total combined shareholding of the Promoter and the overall Promoter Group in the company shall increase upon the full redemption of all the warrants sold. 

The aggregate equity stake of the Promoter and Promoter Group now increases from the current 59.09% to 60.73%. This structural shift further strengthens the promoter group’s overall control and long-term stake in the corporate entity by granting the promoters a majority equity share in the entity.

Fund utilization and strategic objectives

Capital raised from this transaction will be earmarked for various priority business operations and development initiatives. Net proceeds are dedicated to substantial investments in the company’s capacity growth programs in both the aerospace and consumer business segments. 

Much of those funds will be channeled toward the specific development of Hosur. Direct capital will also be used toward direct investment in various subsidiaries and joint ventures that are part and parcel of this expansion roadmap. 

Funds will also be allocated for general corporate purposes beyond the scope of direct project expansions. The equity which has been added will act as a base from which the company will book and subsequently float the requisite term loans for future expansion plans. 

The Board of Directors has exhaustively considered the company’s overall appeal demand till FY28 and concluded that this appeal will meet the requirements of the company’s total appeal, while a comprehensive capital raise shall only be undertaken as and when necessary to support future growth plans.

Conclusion

Aequs Board of Directors have announced the issuance of preferential convertible warrants to Mellwood Trustee Services, which represents a substantial ₹650 crore financial investment from the Promoter Group. The promoter support is substantial, with an upfront payment of ₹325 crore, which translates to 50% of the issue, and an explicit pledge to pay the balance stock price along with the remaining balance due on return until 31 December 2027. This capital infusion will effectively raise the Promoter and Promoter Group stake in the company from 59.09% to 60.73% and will also be sufficient to fund the aerospace, consumer business and Hosur facility development. This reflects Aequs’s sustainable operational footing and helps set the stage for accessing further term borrowing to support its longer-term company development.