Defence Stock To Raise Rs 50 Cr Via Debentures; Parent Firm Backs With Corporate Guarantee

Apollo Micro Systems Limited, often referred to as AMS, is a publicly traded firm headquartered in Telangana that develops key space and defense technology. In addition to providing a corporate guarantee of Rs 50 crore to back its fully owned subsidiary, Apollo Defence Industries Private Limited, the business stated on Friday that its subsidiary, Apollo Defence Industries Private Limited, had issued debentures.

Apollo Defence Industries Private Limited, a subsidiary of the company, has authorized the issue of Rs 50 crore worth of unlisted, secured, redeemable, non-convertible debentures on a preferential basis through private placement. "The debentures will be issued on a private placement basis to institutional investors/financial institutions for a tenure of three years, with the proceeds intended for expanding business operations through acquisition of entities," said AMS in a stock exchange filing on Friday.

The Apollo Micro Systems Limited Board of Directors has authorized granting a Corporate Guarantee of Rs 50 crores in favor of the debenture holders in order to back the subsidiary's fundraising efforts. The company's managing director and promoter, Mr. Baddam Karunakar Reddy, and its full-time director, Mr. Addepalli Krishna Sai Kumar, both possess 14% and 10% of the subsidiary's shares, respectively, and are also promoters of the subsidiary.

"The corporate guarantee does not have an immediate financial liability on Apollo Micro Systems Limited, but it represents a contingent liability. The guarantee has been extended to strengthen the subsidiary's credit profile and facilitate fund-raising," AMS informed stock exchanges on 21st March.

Apollo Micro Systems secured two significant orders valued at Rs 50.97 crores earlier this month on March 5. The business solidifies its position in the defense sector and electronic systems markets with two large domestic orders. A contract worth Rs 11.69 crore has been given to Apollo Micro Systems to produce cutting-edge electronic components. The project shall be finished in four months, with rigorous adherence to testing guidelines and quality requirements. IP CCTV systems are the subject of the second order, which is valued at Rs 39.28 crores. This project, which focuses on security and surveillance infrastructure, is expected to be completed in three months.

In February, AMS and Troop Comforts Limited established a Memorandum of Understanding (MoU) for a strategic commercial partnership focused on the joint development, marketing, and research of advanced air defense systems, including anti-drone and anti-aircraft technologies. A Memorandum of Understanding (MoU) was also inked by AMS and Munitions India Limited to jointly develop a range of defense systems for both domestic and international markets.

A well-known brand in the defense and electronics technology industries, Apollo Micro Systems has been thriving on both order inflows, particularly following recent significant project wins in security and defense electronics.

On Friday, the shares of Apollo Micro Systems ended 6.06% higher on the BSE at Rs 125.10 per share with a market cap of Rs 3,834.18 Cr. The defence scrip reached a 52-week-high of Rs 157.00 on (21/01/2025) and a 52-week-low of Rs 88.10 on (23/10/2024). After almost a five-fold rise from its 52-week low, that is an amazing 400% bounce from the low-a tremendous potential area.