Apollo Micro Systems Share Price Falls Over 4% Despite Company Approving Rs 3,322 Crore Preferential Fund Raise; Check Details

On Tuesday, Indian benchmark indices traded higher in early trade with Nifty 50 gained 29.75 points, or 0.12 per cent, to 24,460.10. Despite the positive market sentiment, Apollo Micro Systems share price fell 4.70 per cent to Rs 403.90 after the company announced a large preferential capital raise.

Apollo Micro Systems Board Approves Rs 3,322 Crore Fund Raise

Apollo Micro Systems approved a preferential capital raise aggregating to approximately Rs 3,322.23 crore through a combination of equity shares and convertible warrants. The proposal was approved at the Board meeting held on July 6, 2026, and is aimed at strengthening the company's capital base to support its future growth plans.

Apollo Micro Systems Rs 951 Crore Equity Share Issue

The Board approved the issuance of up to 2,28,30,902 equity shares having a face value of Rs 1 each at an issue price of Rs 416.60 per share, including a premium of Rs 415.60 per share. The equity issue aggregates to approximately Rs 951.13 crore and will be allotted on a preferential basis to 55 non-promoter investors through private placement. The entire issue price will be payable upfront at the time of application.

Apollo Micro Systems Rs 2,371 Crore Convertible Warrant Issue

The company also approved the issuance of up to 5,69,15,380 convertible equity warrants at an issue price of Rs 416.60 per warrant, aggregating approximately Rs 2,371.09 crore. Each warrant will be convertible into one fully paid-up equity share of face value Rs 1 within 12 months from the date of allotment.

As per the terms of the issue, investors will pay 25 per cent of the warrant subscription amount upfront, while the remaining 75 per cent will be payable at the time of conversion.

The warrants are proposed to be allotted to promoter group entities as well as identified non-promoter investors. Among the promoter participants, Chanakya Reddy Baddam and Kanishka Reddy Baddam are each proposed to receive 1,30,50,000 warrants.

Notably, the company's filing contains an internal inconsistency regarding the warrant allotment. While the Board resolution and the main disclosure consistently state that 5,69,15,380 warrants have been approved, the detailed allottee list in Annexure B adds up to 5,69,11,930 warrants, a difference of 3,450 warrants. However, the aggregate fund raise of Rs 2,371.09 crore has been calculated using the higher figure of 5,69,15,380 warrants, and this remains the officially approved issue size disclosed by the company.
Also Read - Company to Consider Its First-Ever Bonus Issue & Business Restructuring On July 11; Check Details

Other Key Approvals

To facilitate the proposed fund raise, the Board approved an increase in the company's authorised share capital from Rs 45 crore to Rs 63 crore by creating an additional 18 crore equity shares of face value Rs 1 each, ranking pari passu with the existing equity shares.

The Board also appointed Acuité Ratings & Research Limited, a SEBI-registered credit rating agency, as the monitoring agency for the utilisation of proceeds from the preferential issue.

Further, it approved enabling resolutions under Sections 180(1)(a), 180(1)(c) and 186 of the Companies Act, 2013, empowering the company to raise additional borrowings, create security over its assets and make investments, loans or guarantees, subject to shareholder approval.

An Extraordinary General Meeting (EGM) has been scheduled for August 4, 2026, to seek shareholders' approval for the preferential issue and related resolutions.

Management Commentary

The company stated that the proposed capital raise is intended to strengthen its capital base and support future expansion. Along with the preferential issue, the Board has approved increasing the authorised share capital and appointed an independent SEBI-registered monitoring agency to oversee the utilisation of the proceeds, reflecting its focus on governance and long-term growth.

About Apollo Micro Systems

Apollo Micro Systems Limited is a leading Defence and Aerospace electronics company engaged in designing, developing and manufacturing mission-critical electronic systems and subsystems for defence, homeland security and space applications. Its portfolio includes avionics, communication systems, missile subsystems, electronic warfare solutions and other specialised defence electronics supplied to organisations such as DRDO, ISRO, BEL, HAL and the Indian Armed Forces.

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Disclaimer: The article is for informational purposes only and not investment advice.