Apollo Micro Systems Ltd. (BSE: 540879, NSE: APOLLO), a prominent player in India’s aerospace, defence, and homeland security sectors, has successfully raised ₹416.78 crore through a strategic preferential allotment of equity shares and convertible warrants. This capital infusion is poised to bolster the company’s growth trajectory and enhance its capabilities in delivering high-tech, mission-critical solutions.
Breakdown of the Capital Raise
The fundraising initiative comprises two key components:
- Equity Share Allotment: Apollo Micro Systems issued 2,70,42,894 equity shares at ₹114 each (including ₹113 as premium), aggregating to ₹308.29 crore. This allotment attracted participation from 53 non-promoter investors, including notable entities such as LIC Mutual Fund, which acquired 26.31 lakh shares, and other institutional investors like Zeal Global Opportunities Fund and Minerva Ventures Fund.
- Convertible Warrants Issuance: The company also issued 3,80,67,058 convertible warrants at ₹114 each, securing ₹108.49 crore as upfront payment (25% of the issue price). These warrants are convertible into equity shares within six months upon payment of the remaining ₹85.50 per warrant. The promoter group, comprising Baddam Kanishka Reddy and Baddam Chanakya Reddy, subscribed to 1.68 crore warrants, reinforcing their commitment to the company’s long-term growth.
Strategic Implications and Growth Prospects
This substantial capital infusion is set to accelerate Apollo Micro Systems’ expansion plans and innovation initiatives:
- Enhancing R&D and Innovation: The funds will support the development of advanced electronic and electromechanical systems tailored for aerospace and defence applications, strengthening the company’s position as a technology-driven leader in the sector.
- Expanding Operational Capabilities: With increased financial resources, Apollo Micro Systems aims to scale its operations, improve project execution capabilities, and meet the growing demand for its solutions in domestic and international markets.
- Strengthening Financial Position: The capital raise enhances the company’s balance sheet, providing greater financial flexibility to pursue strategic opportunities and navigate the competitive landscape effectively.
Market Response and Financial Performance
The market has responded positively to Apollo Micro Systems’ strategic moves:
- Stock Performance: As of June 3, 2025, the company’s shares witnessed a 1.93% increase, reaching ₹201, close to its 52-week high of ₹202.
- Financial Highlights: In FY25, Apollo Micro Systems reported a 51% year-on-year growth in net sales, reaching ₹562.07 crore, and an 81% increase in profit after tax to ₹56.36 crore. However, in Q4 FY25, while net sales rose by 9% to ₹161.77 crore, profit after tax declined by 23% to ₹13.96 crore, attributed to higher input costs and project execution expenses.
Conclusion
Apollo Micro Systems’ successful capital raise through preferential allotment underscores investor confidence in its strategic vision and growth potential. The infusion of ₹416.78 crore is expected to catalyze the company’s expansion in the aerospace and defence sectors, enhance its technological capabilities, and solidify its position as a key player in India’s defence modernization efforts.
Disclaimer: This blog is for informational purposes only and should not be construed as investment advice. Investors are advised to conduct their own research or consult financial advisors before making investment decision
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