Intimation regarding further investment by Aequs Limited in Aequs Engineered Plastics Private Limited, a wholly owned subsidiary, through Rights Issue.
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Aequs Limited has invested INR 9.23 crore (92,32,117 shares at INR 10 per share) into its wholly owned subsidiary Aequs Engineered Plastics Private Limited (AEPPL) via a rights issue. The investment is funded using IPO proceeds and will support AEPPL's working capital and operational needs. AEPPL manufactures plastic products, parts and toys, and is currently financially stressed with a turnover of INR 54.65 crore, a loss after tax of INR 28.48 crore, and negative net worth of INR -4.36 crore as of March 2025. The subsidiary's revenue has declined sharply from INR 135.60 crore in FY23 to INR 54.65 crore in FY25. The transaction does not change Aequs Limited's 100% ownership of AEPPL.
This is an intra-group capital infusion using IPO funds to prop up a loss-making subsidiary. While it protects existing shareholders from dilution, the continuous support for a financially distressed subsidiary with declining revenues may raise concerns about capital allocation efficiency.