Apollo Micro Systems' board has approved a comprehensive fund raise of up to ₹3,322 crore via preferential shares and convertible warrants, as reported by CNBC TV18. The company will issue up to 2.28 crore new equity shares each to 55 investors at ₹416.6 per share to raise around ₹951 crore. Additionally, the board approved raising the authorised share capital from ₹45 crore to ₹63 crore, adding room for 18 crore new ₹1 shares. The company will also issue up to 5.69 crore convertible warrants to 93 investors at ₹416 apiece to raise up to ₹2,371 crore. Notably, two members of the promoter family, Chanakya Reddy Baddam and Kanishka Reddy Baddam, will together receive 2.61 crore warrants.
Shares of Apollo Micro Systems declined more than 5% on Tuesday, extending the previous session's similar fall, as reported by Moneycontrol. The stock fell as much as 5.5% to ₹400.50 in morning trade, placing it among the top losers on the BSE Smallcap index. The announcement seemingly prompted investors to book profits following the recent rally in the stock. Despite the recent decline, the stock has gained 45% so far this year, significantly outperforming the Nifty 50, which is down around 6.5% over the same period. The current selling pressure follows the board's announcement of the fund-raising proposal, with investors anticipating the outcome of the proposed equity issuance.
According to LiveMint reports, the preferential equity issue involves 55 investors, with major allottees including Saint Capital Fund with 50 lakh shares, Nautilus Private Capital Ltd, Maestro Emerging Fund PCC-Value Investing, Robust Knights Fund PCC-Cell 1, M7 Global Fund PCC Cell Dewcap Fund and Cullinan Opportunities Incorporated VCC Sub Fund 1 with 25 lakh shares each, and Tata Mutual Fund with 12 lakh shares. For the warrant issue, the largest proposed allottee is Opal Global Diversified Fund Limited with 1.20 crore warrants, followed by Cullinan Opportunities Incorporated VCC Sub Fund 1 with 45 lakh warrants. Promoters Chanakya Reddy Baddam and Kanishka Reddy Baddam are proposed to receive 1.30 crore warrants each.
Apollo Micro Systems is likely to be one of the beneficiaries of the Defence Acquisition Council's ₹52,000 crore procurement plan for the Indian Army, Navy and Air Force, according to CNBC TV18 reports. For the Indian Army, the DAC cleared procurement of the AKASH TARANG Anti-UAV Electronic Warfare System, which aims to protect military assets against hostile drones. Meanwhile, for the Indian Navy, the DAC has approved procurement of Multi-Influence Ground Mines (MIGM), designed to restrict adversary naval manoeuvres. The company is among the companies expected to benefit from these defence programmes. The stock had previously rallied over the previous two trading sessions after the Defence Acquisition Council approved acquisition proposals worth around ₹52,000 crore for the armed forces.
The company has scheduled an extraordinary general meeting (EGM) to be held on August 4, 2026 via video conferencing to vote on these proposals, as reported by CNBC TV18. July 28 has been fixed as the cut-off date for determining shareholders eligible to vote electronically. The board also approved the appointment of Acuité Ratings & Research Limited as the monitoring agency for the preferential issue proceeds, authorised borrowing beyond the company's paid-up share capital and free reserves, and cleared proposals relating to loans, guarantees and investments under the Companies Act, subject to shareholder approval.
