Apollo Micro Systems fundraise: ₹3,322 crore plan (2026)

Why Apollo Micro Systems is in focus

Apollo Micro Systems, a Hyderabad-based defence electronics company, is in focus after its board approved a large capital-raising plan of up to ₹3,322 crore. The company plans to raise the money through a preferential issue of equity shares and convertible warrants. The proposals will require shareholder approval, and the company has already set an Extraordinary General Meeting (EGM) date to seek the required clearances.

The announcement came at a time when the stock had recently seen a sharp run-up, and the immediate market reaction included profit booking. Investors also tracked the size of the fundraise relative to the company’s capital base and the fact that a material portion is proposed via warrants, which convert to equity later under regulatory timelines.

Stock move after the board decision

Apollo Micro Systems shares closed 5.75% lower at ₹424.05 on Monday. The stock also fell nearly 6% in early trade on Tuesday, July 7, after the board cleared the fund-raising plan worth up to ₹3,322 crore. The move was attributed in market commentary to profit booking after a recent rally, alongside investor assessment of dilution and execution timelines.

The fundraise, if fully executed, would expand the company’s capital base meaningfully. The company’s filings indicate the board has also approved steps to increase authorised share capital to accommodate the proposed issuance and any conversion of warrants into equity.

Structure of the ₹3,322 crore fundraise

The fundraising plan has two parts: a preferential issue of equity shares and a preferential issue of convertible equity warrants. Apollo Micro Systems said it would issue up to 2.28 crore equity shares at a price of ₹416.60 per share to raise up to ₹951 crore. Separately, it plans to issue up to 5.69 crore convertible equity warrants at ₹416.60 each to raise up to ₹2,371 crore.

The company’s exchange filing specifies that each warrant will be convertible into, or exchangeable for, one equity share of face value ₹1 each within 12 months, in accordance with applicable law. The combined amount, if fully raised, totals ₹3,322 crore.

Preferential equity issue: key details and investors

According to the exchange filing, the board approved issuing up to 2,28,30,902 equity shares on a preferential basis to 55 investors. The issue price is ₹416.60 per share, including a premium of ₹415.60 per share. The aggregate amount for this equity leg is ₹951.13 crore.

The list of proposed allottees includes Saint Capital Fund, which is set to receive 50 lakh shares, and Tata Mutual Fund, which is proposed to receive 12 lakh shares. The filing also notes that preferential allotments are often used by listed companies to bring in institutional or strategic investors without launching a public offer.

Convertible warrants: size, terms, and proposed allottees

The second and larger leg involves issuing up to 5,69,15,380 convertible equity warrants to 93 investors at ₹416.60 each, aggregating up to ₹2,371.09 crore. The warrants are proposed to be issued on a preferential basis through private placement, subject to statutory, regulatory, and shareholder approvals.

Apollo Micro Systems stated that upon issuance of the warrants, an amount equivalent to 25% of the total issue size shall be called upfront from the proposed warrant allottees. Each warrant is convertible into one fully paid-up equity share of face value ₹1, and may be exercised in one or more tranches within 12 months from the date of allotment.

Two members of the promoter family, Chanakya Reddy Baddam and Kanishka Reddy Baddam, are among the proposed warrant allottees. Together, they are expected to receive 2.61 crore warrants, with 1,30,50,000 warrants proposed for each.

EGM date, voting cut-off, and approval process

The company said the fund raise will be placed before shareholders at an EGM on August 4, 2026. The meeting will be conducted through video conferencing. Shareholders on record as of July 28 will be eligible to vote on the proposals.

The filings also state that the entire preferential equity issue consideration will be payable at the time of application. In addition to approving the issuance of shares and warrants, the board has cleared related resolutions that are typically linked to large capital actions.

Authorised share capital increase and monitoring agency

Apollo Micro Systems plans to increase its authorised share capital from ₹45 crore to ₹63 crore. This change will create room for an additional 18 crore equity shares of ₹1 each. The company indicated the move is necessary to accommodate the proposed securities issue and any future conversion of warrants into equity.

The board also approved the appointment of Acuité Ratings & Research Limited as the monitoring agency for the preferential issue proceeds. In the same set of approvals, it authorised borrowing beyond the company’s paid-up share capital and free reserves, approved creation of security, and cleared proposals relating to loans, guarantees, and investments under the Companies Act, subject to shareholder approval.

What the company may use the funds for

The company did not specify a detailed fund utilisation schedule in the provided information, but industry experts cited in the context said the capital could be used for expansion, working capital, and new defence opportunities. For investors, commentary highlighted that tracking utilisation of proceeds and order inflows would be important after the fundraise.

Any actual deployment will depend on shareholder approvals, final allotment, and conversion of warrants within the specified timelines. Given the structure includes warrants that convert over time, investors often track both upfront inflows and subsequent equity issuance as conversions occur.

Background: earlier preferential allotments and an acquisition

Apollo Micro Systems had earlier announced allotments in June. The company said it approved the allotment of 2,70,42,894 equity shares on a preferential basis at an issue price of ₹114 per share, aggregating to ₹308.29 crore. It also approved the allotment of 3,80,67,058 convertible equity warrants on a preferential basis at an issue price of ₹114 each, aggregating to ₹108.49 crore, with the filing noting a warrant subscription price of ₹28.50 and an exercise price of ₹85.50.

Separately, the company announced on May 2, 2025, that through its wholly owned subsidiary Apollo Defence Industries Private Limited, it entered into a Share Purchase Agreement to fully acquire IDL Explosives Limited for ₹107 crore in an all-cash transaction. The acquisition consists of 78.65 lakh equity shares priced at ₹136.04 each.

Key facts snapshot

Market impact and what investors tracked

The immediate market response was negative, with the stock falling on the day of focus and showing further weakness in early trade the next day. Part of the reaction reflected profit booking after a recent rise, while the structure of the fundraising also brings investor attention to potential dilution and the timeline for warrant conversion.

Because the capital raise is routed through preferential issues, investors also typically watch the profile of allottees, pricing relative to market price, and the pace at which warrants are exercised. The company has also outlined process steps like the EGM and cut-off date, which are central to the execution timeline.

Why the development matters

The planned raise is large and combines immediate equity issuance with a warrant instrument that can convert into shares later. It also requires an increase in authorised capital, showing that the company is planning for a materially higher equity base if approvals and conversions proceed.

For market participants, the next milestones are procedural: shareholder approval at the EGM and subsequent allotments. Beyond that, investor focus, as noted in the provided context, remains on how the proceeds are utilised and whether order inflows support the company’s expansion plans.

Conclusion

Apollo Micro Systems has outlined a ₹3,322 crore fundraising plan through preferential equity shares and convertible warrants, alongside a proposal to increase authorised share capital and appoint a monitoring agency. The company will take the proposals to shareholders at an EGM on August 4, 2026, with July 28 as the cut-off date for voting eligibility. The stock saw profit booking after the announcement, and the next key updates are expected through shareholder decisions and subsequent allotment disclosures.