Defence Stock Apollo Micro Systems Secures Rs 416.78 Cr Through Preferential Allotment

On June 3, 2025, the shares of Apollo Micro Systems Ltd (AMS) gained 1.93% on Tuesday, reaching Rs 201 from a previous close of Rs 197.20. The stock is currently at Rs 202, not far off from its 52-week high of Rs 202. Apollo Micro Systems stands proudly as a small-cap juggernaut, claiming 1,450% returns over three years and 2,250% gains over five years. Its 52-week low is 88.10.

With the rally, Apollo Micro Systems joined other systems after stock soared at BSE and NSE after announcements for in-principle approvals provided signalled for a major fundraise through preferential allotment. The company's Securities Allotment Committee approved the issuance of 2.70 crore equity shares at Rs 113 premium per share (Rs 1 face value), aggregating to Rs 308.29 crore. 53 identified non-promoter entities will be granted those shares.

Alongside the aforementioned equity issuance, the company has also approved the issue of 3.80 crore convertible equity warrants on a preferential basis to thirty other non-promoter and promoter group participants. The warrants have been secured for a certain price of Rs 114 each, which adds up to Rs 108.49 crore. The requirement to pay an upfront subscription of 28.50 per warrant is also fulfilled, along with the remaining 85.50 balance payable upon conversion within 6 months.

Equity shares and warrants have also received side piqued in regard to SEBI's Issue of Capital and Disclosure Requirements Regulations of 2018. As equity shares were fully subscribed and the warrant amount of around 25 per cent was received, the company was able to successfully mobilize close to 416.78 crores, which shall be used to sharpen the growth in the next phase.

"We are proud to share that Addepalli Krishna Sai Kumar, Whole Time Director (Operations), Aditya Kumar Halwasiya, Non-Executive Non- Independent Director, Sudarshan Chiluveru, Chief Financial Officer have participated in this offering alongside members of the Promoter Group. This reinforces the confidence held by our Board members and key managerial personnel further in Apollo's long-term strategic vision. Their alignment with the promoter group not only reflects individual conviction but also underscores the unity and resilience of our leadership team," said Mr. Baddam Karunakar Reddy, Managing Director of the company.

Apollo Micro Systems is currently witnessing strong business momentum along with a growing portfolio and a robust order book of defence programs. With its latest purchase of IDL Explosives Ltd. The firm is aiding in acquiring a fully integrated tier one defence OEM, which further enhances the company's capabilities within the defence value chain. This, along with the claim of the revenue growth reaching the 45-50 per cent mark in the upcoming two years, showcases their aggressive growth approach.

This year alone, AMS also received an important export deal of an advanced avionic system for USD 13.37 million (approx. Rs 113.81 crore), which further established its international presence and AMS's commitment towards enhancing self-reliance in Indian defence systems.

In fiscal year 2025, AMS's financials were exceptional, with annual net sales reaching Rs 562.07 crore for a 51% growth and a PAT of Rs 56.36 crore, an 81% increase from FY24. Net sales in Q4FY25 went up by 9% to Rs 161.77 crore, but profit after tax dropped 23% to Rs 13.96 crore due to high input costs and costs associated with project execution against budgeted estimates.

Apollo Micro Systems was established in 1985 and it focuses on the design and manufacturing of mission-critical electronic and electromechanical systems solutions in the aerospace, defence and space sectors. Their innovation-led approach allows them to develop advanced products like torpedo-homing systems and underwater mines.

The company is now drawing institutional interest, with a market cap exceeding Rs 6000 crore placed in the BSE Small-Cap Index. FIIs raised their holding to 0.93% in March 2025 from 0.74% in December 2024, which means during this quarter, they bought more than 6 lakh shares.