The moves, as explained by Executive Chairman and CEO Aravind Melligeri, in an interview with ET Now, signal that Aequs is no longer content being a world-class component supplier. It wants to own the system.
The drone play: Ajna Aerospace and the ₹10 crore bet
Aequs Limited has invested ₹10.01 crore in Ajna Aerospace & Defence Private Limited by subscribing to equity shares and seed compulsorily convertible preference shares, with the securities formally allotted on March 6, 2026.
Post-subscription, Aequs holds a 33.33% stake in Ajna on a fully diluted basis — an equal three-way split with venture capital firm Accel India and Vagus Defence Tech & Aerospace Fund I.
The JV’s scope is sweeping. Ajna will source and license UAV-related intellectual property from overseas partners, develop its own proprietary IP, and manufacture, assemble, test, market and sell UAVs and related products in India and abroad.
Melligeri was direct about the strategic rationale: “We did not want to do a component manufacturing play on the defence side. We wanted a system-level play.” The technology, he said, will arrive through transfer agreements with German, Israeli, and Ukrainian partners — with the end goal being 100% India-based manufacturing. Aequs will serve as the operating manufacturing partner within the JV.
The CEO confirmed that UAV revenues are expected to begin flowing from FY28 onwards, though FY27 remains a possibility depending on the pace of government defence contract sign-offs.
Why now? India’s defence drone demand is accelerating fast
The timing of Aequs’s pivot is no accident. India’s defence establishment is in the midst of a drone acquisition surge — and domestic manufacturers that can deliver are being given every advantage.
On March 3, 2026, India’s Defence Procurement Board cleared the development phase of the Ghatak stealth drone project and recommended the acquisition of 60 Ghatak drones, a proposal that now awaits approval from the Defence Acquisition Council. The technology perspective and capability roadmap further envisages the acquisition of up to 100 stealth UCAVs for the Indian Air Force and 50 for the Indian Army.
For a company with Aequs’s precision manufacturing credentials and existing defence supply chain relationships, this demand environment represents a generational window. Melligeri acknowledged that future requirements — including components for India’s Advanced Medium Combat Aircraft (AMCA) — are explicitly part of the long-term vision.
The bigger bet: ₹1,900 crore for India’s aero engine ecosystem
While the drone venture attracts the headlines, Melligeri’s arguably more transformational commitment is a ₹1,900 crore MoU signed with the Tamil Nadu government to build a fully vertically integrated aero engine component manufacturing facility.
Aequs signed the MoU with the Tamil Nadu Government for the ₹1,900 crore manufacturing unit in February 2026.
The ambition mirrors what the company spent 15 years building in Belagavi on aerostructures — but applied to the far more technically demanding engine side of aviation. Melligeri explained: “We built a facility that can deliver 100% in-country value-add on aerostructures. We are trying to do the same on the aero engine side, where very little vertical integration exists in India today.”
The economics make the case compelling. A commercial aircraft is delivered with two engines — but over a 30-year operational life, engine components are replaced many times over. The aftermarket opportunity on engine components dwarfs the original equipment sale, and global aero engine manufacturers are actively seeking supply chain diversification away from a handful of concentrated geographies.
Aequs already supplies critical components across engine systems, landing systems, and aircraft structures for major global programmes including the Airbus A320 and Boeing B737, with its aerospace segment contributing approximately 89% of revenues in FY25.
The ₹1,900 crore will be deployed over a 10-year period — a timeline Melligeri described as a “long-term play” consistent with how the company has always built capacity: deliberately, with global partnerships, and with a vertically integrated model that creates durable competitive moats.
A company redefining itself — from parts maker to defence platform
Aequs completed its IPO in December 2025, raising ₹670 crore, and listed on the NSE at ₹140 per share — a 12.9% premium to its issue price.
Q3 FY26 revenues surged 51% to ₹326.2 crore, even as the company reported a widening net loss NPR — a pattern consistent with a business investing aggressively in future capacity rather than optimizing short-term profitability.
The dual announcements, Ajna Aerospace for drones, and the Tamil Nadu MoU for aero engines, represent two legs of the same strategy: use Aequs’s world-class manufacturing infrastructure and global OEM relationships as the foundation, and build upward into higher-value, higher-margin system-level defence and aerospace products.
For India’s Make in India defence manufacturing ambitions, Aequs is quietly becoming one of the most important industrial stories to watch.