🟢 At a Glance:
Apollo Micro Systems has approved a massive ₹416 crore preferential allotment split between equity shares and convertible warrants. This includes allotting 2.7 crore shares and over 3.8 crore warrants at ₹114 each — a move that screams “we’re preparing for something big.” But what exactly? Capex? Orders? Expansion? Or just balance sheet bodybuilding?
🏭 About Apollo Micro Systems
- Industry: Defence and Aerospace Electronics
- Focus: Custom-built mission-critical systems for DRDO, HAL, BDL, BEL
- Listed Entity: BSE (540879), NSE (APOLLO)
- Promoter: Baddam Karunakar Reddy
Apollo builds things that go into missiles, not moonshots. Think rugged embedded systems for Indian defence platforms.
💰 Allotment Breakdown
✅ Equity Shares
| Metric | Detail |
|---|---|
| Quantity | 2,70,42,894 shares |
| Face Value | ₹1 |
| Issue Price | ₹114 (₹113 premium) |
| Total Raised | ₹308.29 Cr |
| Investors | 53 (including LIC Mutual Fund, foreign funds, HNIs) |
✅ Convertible Warrants
| Metric | Detail |
|---|---|
| Quantity | 3,80,67,058 |
| Warrant Price | ₹114 |
| Paid Now | ₹28.5 (25%) |
| Balance | ₹85.5 (75%) on conversion |
| Total Raised Now | ₹108.49 Cr |
| Promoter Participation | YES (Baddam Kanishka & Chanakya Reddy got 84 lakh warrants each) |
| Conversion Window | Within 6 months |
📜 Notable Allottees
Equity Shares:
- LIC Mutual Fund – 26.3 lakh shares
- Zeal Global Opportunities Fund – 30.16 lakh shares
- Nova Global Opportunities Fund – 26 lakh shares
- MGO High Conviction Fund – 30.7 lakh shares
- Minerva Ventures, Al Maha Investment Fund – 25 lakh each
Warrants:
- Ebisu Global Fund – 1 crore warrants 😳
- Promoter Group – 1.68 crore warrants
- Ashish Jain, Superstar Investments, SB Opportunities Fund 1, etc.
💣 What’s Cooking?
Why raise ₹416 crore unless something explosive is on the horizon?
Here’s the speculation buffet:
- Big defence orders incoming?
- CapEx for new plants or R&D?
- Working capital ahead of FY26 PSU procurement drive?
- BrahMos or Akash tie-up expansion?
- Or… pure dilution + promoter consolidation pre-election?
📉 Shareholding Impact
This kind of preferential issue usually dilutes existing shareholders, especially when warrants are exercised later.
Expect:
- Drop in EPS temporarily
- Increased promoter holding if warrants are converted
- FPI inflow sentiment might offset dilution if defence order visibility improves
🧠 EduInvesting Take
“Apollo just loaded a ₹416 crore war chest. But are they going to war… or buying fireworks for Diwali?”
It’s bold. It’s massive. And it’s not retail-friendly in the short term due to dilution. But it shows Apollo is prepping for scale. Possibly DRDO-BEL deals? New missiles? Embedded systems revamp?
Promoter confidence via large warrant subscription is a big green flag. But now eyes are on whether this capital leads to actual order book explosions.
🚩 Risks
- Equity dilution of over 25% post conversion
- No clear use-of-proceeds mentioned
- 6-month warrant conversion window leaves investors guessing
- Execution risk if funds aren’t immediately deployed in margin-positive projects
📅 Published: 2 June 2025
✍️ Author: Prashant Marathe
🏷️ Tags: Apollo Micro Systems, Preferential Allotment, Equity Shares, Warrants, Defence Stocks, DRDO Vendors, LIC MF, Ebisu Fund, BSE 540879, NSE APOLLO
