Defence Stock Apollo Micro Systems In Focus On Preferential Issue To Raise Funds

Today, shares of Apollo Micro Systems Ltd surged 4.22 percent, reaching Rs 128.40 per share from the previous closing of Rs 123.20. The stock's 52-week high stands at Rs 161.70, while its 52-week low is Rs 52.05.
Apollo Micro Systems Limited announced plans to issue up to 2,45,00,700 convertible warrants to a mix of promoter groups and identified non-promoter individuals/entities. These warrants can be converted into equity shares within 18 months at Rs 108 per warrant, raising up to Rs 264.6 crores. The company also received approval to extend loans or guarantees up to Rs 1,000 crore, subject to member approval.

In this allotment, promoters Baddam Kanishka Reddy and Baddam Chanakya Reddy will each receive 20,40,300 warrants. The remaining 2,04,20,100 warrants will be allocated to 12 non-promoters: Anudeep Adiraju, Rajshri Karwa, V Swarna Latha, Bhagyalaxmi Chiluveru, Reena Karwa, Superstar Investments Private Limited, Eminence Global Fund, North Star Opportunities Fund, AG Dynamic Funds, Enugu Ramya, Bairagoni Nishwanth, and Aerpula Krishna.

Recently, Apollo Micro Systems was awarded a prestigious Make II project by the Directorate General of AAD, IHQ of MOD (Army), to develop a Vehicle Mounted Counter Swarm Drone System (VMCSDS) (Version I). This is the company's first Make II project and involves no cost obligation. Awarded under the Make II category of DAP-2020, the project requires the development of cutting-edge, futuristic systems within 85 weeks for single-stage composite trials and staff evaluation. This project marks a significant milestone for the company as it contributes to India's defence capabilities.

According to the Q4FY24 quarterly results, Apollo Micro Systems saw a 26.76 percent increase in net sales to Rs 135.44 crore and a 79.23 percent increase in profit after tax (PAT) to Rs 12.93 crore compared to Q4FY23. In its annual results, the company reported a 24.91 percent increase in net sales to Rs 371.63 crore and a 66.01 percent increase in PAT to Rs 31.11 crore in FY24 compared to FY23.

Apollo Micro Systems falls under the BSE Small-Cap Index with a market cap of over Rs 3,700 crore. The promoters increased their stake to 55.12 percent in June 2024 from 53.21 percent in March 2024 by acquiring 1,86,66,000 shares. With its strong financial performance, strategic initiatives, and robust market position, Apollo Micro Systems is a multibagger stock that investors should keep under the radar. The company's innovative projects and strategic expansions highlight its potential for sustained growth and value creation in the aerospace and defense sectors.

Established in 1985, Apollo Micro Systems is a leader in creating, constructing, and validating crucial electronics and electro-mechanical solutions for sectors such as aerospace, defense, and space. The company is renowned for its commitment to research and development, resulting in notable projects such as torpedo-homing systems and underwater mines.