Apollo Micro Systems Limited , a player in the aerospace and defense sector, has announced the allotment of 35,088 equity shares following the conversion of warrants. This move comes as part of the company's ongoing preferential issue process.

Key Details of the Allotment

• Allottee: Mr. Piyush Bhupendra Gala (Non-Promoter)
• Number of Shares Allotted: 35,088
• Face Value: Re. 1 per share
• Issue Price: Rs. 114.00 per share (including a premium of Rs. 113.00)
• Total Amount Received: Rs. 40,00,032.00

Impact on Share Capital

Following this allotment, Apollo Micro Systems' paid-up capital has increased from Rs. 33,56,39,648.00 to Rs. 33,56,74,736.00, now consisting of 33,56,74,736 equity shares of Re. 1 each.

Warrant Conversion Details

The company had initially allotted 3,80,67,058 convertible equity warrants on a preferential basis. The current allotment represents a partial conversion of these warrants. Key points include:

• Conversion Price: Rs. 114.00 per warrant
• Upfront Payment: 25% (Rs. 28.50 per warrant) received at the time of warrant subscription
• Balance Payment: 75% (Rs. 85.50 per warrant) received for the converted warrants

Utilization of Preferential Issue Proceeds

Apollo Micro Systems has confirmed that there has been no deviation in the utilization of the preferential issue proceeds, which totaled Rs. 434.80 crores. The funds are being used for:

1. Working capital requirements
2. Research and development
3. General corporate purposes

The company has utilized Rs. 4.13 crores for consultancy charges related to the preferential issue, which falls under general corporate purposes.

Monitoring Agency Report

Acuite Ratings & Research Limited, appointed as the monitoring agency, has submitted a report confirming the proper utilization of funds in line with the stated objectives.

Remaining Warrants

Out of the total warrants allotted:

• 21,07,194 warrants were converted previously
• 35,088 warrants have been converted in the current allotment
• The remaining unexercised warrants will lapse if not converted within six months from the date of allotment

This corporate action demonstrates Apollo Micro Systems' ongoing efforts to strengthen its capital base, potentially supporting its operations in the aerospace and defense sector. Investors and market watchers may want to keep an eye on how the company utilizes these funds to drive growth and innovation in its core business areas.

Apollo Micro Systems Limited (AMS), a key player in India's defense technology sector, has reported its highest-ever quarterly revenue of ₹225.00 crores in Q2, marking a significant 69% quarter-on-quarter increase. The company's performance underscores its growing prominence in the indigenous defense manufacturing ecosystem.

Financial Highlights

• Q2 Performance:

  • Revenue: ₹225.00 crores (69% QoQ growth)
  • EBITDA: ₹59.00 crores
  • PAT: ₹30.00 crores (70% QoQ increase)

• H1 Performance:

  • Revenue: ₹359.00 crores (42% growth compared to H2 of previous year)
  • EBITDA: ₹100.00 crores
  • PAT: ₹48.00 crores (97% YoY increase)

Strategic Developments

1. Acquisition of Ideal Explosives Limited (IDL): AMS has completed the acquisition of IDL for ₹107.00 crores, marking a significant step in both backward and forward integration.

2. Capacity Expansion: The company's Unit 3 Phase 1 is nearing completion, with partial production already underway. Full-fledged operations are expected to commence by the end of the current financial year or early Q1 next fiscal year.

3. Order Book: AMS maintains a robust order book of approximately ₹800.00 crores, supporting its growth trajectory.

4. Future Growth Projections: Management anticipates a 45-50% CAGR over the next two fiscal years, driven by the core business, excluding contributions from recent acquisitions.

Technological Advancements

AMS has evolved from a subsystem and systems manufacturer to establishing itself as a full-fledged weapons manufacturer. The company has a presence in various critical defense programs:

• Participation in every indigenous missile program of DRDO
• Development of anti-submarine warfare rockets
• Advancements in underwater mine projects
• Progress in ground-to-air rockets and guided rockets
• Development of miniaturized diver-carrying mines and anti-tank mines

Outlook and Challenges

While AMS shows strong growth potential, the company faces challenges in talent acquisition and retention in the specialized defense technology sector. The management emphasizes a retention-focused approach and complements its workforce with retired experts from DRDO and defense PSUs.

The company is actively pursuing opportunities in large-scale defense projects, including potential orders from programs like MIGM, QRSAM, and various naval initiatives. However, the timelines for these orders remain subject to government approval processes.

Management Commentary

Baddam Karunakar Reddy, Managing Director of Apollo Micro Systems, stated, "We have delivered our highest ever quarterly revenue and PAT marked by consistent execution, operational discipline and a strong commitment to indigenization and the Make in India initiative."

He further added, "Building on 40 years of technological excellence, we are poised to evolve into a multidisciplinary defense system powerhouse to drive next-generation innovation."

As Apollo Micro Systems continues to strengthen its position in India's defense technology landscape, investors and industry observers will be keenly watching its execution of the ambitious growth plans and its role in enhancing the country's defense capabilities.