Apollo Micro Systems Secures Approval for 69.17 Million Securities

Apollo Micro Systems Limited has received in-principle approval from NSE and BSE for a preferential issue comprising 3,11,05,210 equity shares and 3,80,67,059 convertible equity warrants, or 69.17 million securities in total. The securities will be issued at a price not less than ₹114 each, subject to the stated terms of the preferential allotment.

What have NSE and BSE approved for Apollo Micro Systems?

NSE and BSE have granted Apollo Micro Systems in-principle approval under Regulation 28(1) of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The approval covers 3,11,05,210 equity shares and 3,80,67,059 convertible equity warrants proposed to be issued on a preferential basis.

The equity shares have a face value of ₹1 each and are proposed to be issued to non-promoters at a price not less than ₹114 per share. The warrants are also linked to equity shares with a face value of ₹1 each, and their conversion price is not less than ₹114 per warrant.

The exchange approvals are an important procedural step for the proposed allotment. They do not by themselves state the final allotment date, conversion date, or the final amount that may be received from warrant holders.

How are the equity shares and warrants structured?

Apollo Micro Systems will issue the equity shares directly to non-promoter investors, with the stated issue price being at least ₹114 per share. These shares will be equity capital on allotment and carry the terms applicable to the proposed preferential issue.

The 3,80,67,059 warrants are convertible into an equal number of equity shares. This means each warrant can result in one equity share of face value ₹1 when converted under the terms of the issue. The warrants are proposed for both promoter and non-promoter investors.

The source material also refers to an earlier allotment of 3,80,67,058 warrants to 30 allottees and the subsequent conversion of 21,43,095 warrants into equity shares at ₹114 each. Separately, Apollo Micro Systems disclosed trading authorisation from NSE and BSE for 11,696 equity shares issued to non-promoters under a preferential allotment.

These disclosures show that the company has used preferential securities, including warrants, as part of its capital-raising process. However, the number of shares ultimately added through the currently approved warrants will depend on their conversion in accordance with the applicable issue terms.

Why is Apollo Micro Systems raising capital through preferential issues?

Apollo Micro Systems has separately proposed a substantially larger preferential fundraise at ₹416.60 per equity share or warrant. Its board approved the proposed issuance of up to 2,28,30,902 equity shares, aggregating about ₹951.13 crore, and up to 5,69,15,380 convertible warrants, aggregating about ₹2,371.09 crore.

That proposal would total approximately ₹3,322.22 crore and is stated to be subject to shareholder and regulatory approvals. The company said the equity shares would be allotted to 55 non-promoter investors, while the warrants would be issued to 93 investors, including promoter group entities and identified non-promoter investors.

Under the ₹416.60 warrant proposal, subscribers must pay 25% of the warrant price upfront and the balance 75% at the time of conversion. Each warrant may be exercised in one or more tranches within 12 months from the date of allotment. Apollo Micro Systems also approved an increase in authorised share capital from ₹45 crore to ₹63 crore through the creation of 18 crore additional equity shares of face value ₹1 each.

The company called an extraordinary general meeting for August 4, 2026, in connection with its capital-raising proposals. Its stated uses for the larger proposed fundraise include acquisitions, debt repayment and working capital.

What is the subsidiary debenture proposal and corporate guarantee?

Apollo Defence Industries Private Limited, a subsidiary of Apollo Micro Systems, has approved the issuance of unlisted, secured, redeemable non-convertible debentures worth ₹50 crore. The debentures are proposed to be issued on a preferential basis through private placement to institutional investors and financial institutions.

The debentures have a tenure of three years, and the proceeds are earmarked for expanding operations through entity acquisitions. To support the subsidiary's proposed borrowing, Apollo Micro Systems has approved a corporate guarantee of ₹50 crore in favour of the debenture holders.

The corporate guarantee is described as a contingent liability and will remain valid until the full redemption of the debentures. It is being provided without additional consideration and is intended to support the subsidiary's credit profile for the proposed debt issuance.

What should investors distinguish across these disclosures?

Investors should distinguish the exchange-approved issue at a price not less than ₹114 from the separately disclosed ₹416.60 preferential fundraising proposal. The disclosures refer to different issue sizes, prices and stages in the approval process.

The ₹114 approval involves 3,11,05,210 shares and 3,80,67,059 warrants. The later ₹416.60 proposal involves up to 2,28,30,902 shares and up to 5,69,15,380 warrants, and its completion remains subject to the stated shareholder and regulatory approvals.

The warrant structure is relevant because warrants do not become equity shares until conversion. Under the ₹416.60 proposal, only 25% of the warrant amount is payable upfront, while the remaining payment is due at conversion. The timing and extent of conversion therefore affect when additional equity shares may be issued.

The subsidiary's ₹50 crore debenture proposal adds a debt-financing element to the broader funding activity. Apollo Micro Systems' guarantee links the parent company to the subsidiary's repayment obligation until the debentures are fully redeemed.

Conclusion

The in-principle approvals from NSE and BSE allow Apollo Micro Systems to proceed with its proposed preferential issue of 3,11,05,210 equity shares and 3,80,67,059 convertible warrants at a price not less than ₹114. The company has also disclosed a separate, larger proposed ₹3,322.22 crore preferential capital raise and a ₹50 crore debt proposal by its subsidiary backed by a corporate guarantee.

Investors will watch the outcome of the August 4, 2026 extraordinary general meeting, the required regulatory and shareholder approvals for the ₹416.60 proposal, and any subsequent allotment or warrant-conversion disclosures. The terms and timing of the subsidiary's ₹50 crore debenture issuance will also remain relevant because the parent guarantee continues until full redemption.