Apollo Micro Systems Shares Fall Nearly 6% After ₹3,322 Crore Fundraising Plan; Defence Orders Remain a Key Growth Trigger

7 Jul 2026 , 10:46 AM

Shares of Apollo Micro Systems Ltd. came under pressure on Tuesday, July 7, declining nearly 6% after the company’s board approved a massive ₹3,322 crore fundraising plan through a preferential issue of equity shares and convertible warrants.

While investors reacted negatively to concerns over potential equity dilution, the company continues to be viewed as a key beneficiary of India’s expanding defence procurement programme, providing long-term growth opportunities.

Apollo Micro Systems Approves ₹3,322 Crore Fund Raise

Apollo Micro Systems’ board approved raising up to ₹3,322 crore through a combination of:

• Preferential allotment of equity shares
• Convertible warrants

The company also approved an increase in its authorised share capital from ₹45 crore to ₹63 crore, creating room for the issuance of 18 crore additional equity shares with a face value of ₹1 each.

The fundraising is expected to strengthen the company’s balance sheet and support future expansion plans.

Equity Shares Worth ₹951 Crore to Be Issued

As part of the fundraising exercise, Apollo Micro Systems will issue up to 2.28 crore equity shares to 55 investors at an issue price of ₹416.60 per share, raising approximately ₹951 crore.

Some of the prominent investors participating in the preferential allotment include:

• Saint Capital Fund – 50 lakh shares
• Tata Mutual Fund – 12 lakh shares

The participation of institutional investors highlights continued interest in the company despite the short-term market reaction.

Convertible Warrants to Raise ₹2,371 Crore

The board also approved the issuance of up to 5.69 crore convertible warrants to 93 investors at ₹416 per warrant, which could generate up to ₹2,371 crore.

The promoter family is also participating in the fundraising.

Promoters Chanakya Reddy Baddam and Kanishka Reddy Baddam together will receive 2.61 crore convertible warrants, reflecting their confidence in the company’s future growth prospects.

Shareholders to Vote in August

Apollo Micro Systems will seek shareholder approval for the fundraising proposals at an Extraordinary General Meeting (EGM) scheduled for August 4, 2026, which will be conducted through video conferencing.

Shareholders holding shares as of July 28, 2026, will be eligible to vote on the resolutions.

Why Did Apollo Micro Systems Shares Fall?

Despite the positive long-term outlook, was largely attributed to profit booking following its strong run this year. The announcement of a large fundraising exercise also raised concerns about potential equity dilution, which could temporarily impact earnings per share (EPS) and the value of existing shareholders’ holdings.

As a result, Apollo Micro Systems shares fell nearly 6%, trading around ₹404.25 during morning deals. Despite the sharp decline, the stock has still delivered an impressive 46.5% gain so far in 2026, reflecting continued investor confidence in its long-term growth story.

Defence Procurement Could Drive Future Growth

Apollo Micro Systems is expected to benefit from the Defence Acquisition Council’s (DAC) ₹52,000 crore procurement plan for the Indian Armed Forces.

The recently approved procurement proposals include:

AKASH TARANG Anti-UAV Electronic Warfare System

For the Indian Army, the DAC approved the procurement of the AKASH TARANG Anti-UAV Electronic Warfare System, designed to protect military assets against hostile drones and evolving aerial threats.

Multi-Influence Ground Mines (MIGM)

For the Indian Navy, the council approved the procurement of Multi-Influence Ground Mines (MIGM), which are intended to strengthen India’s maritime defence capabilities by restricting enemy naval movements.

Apollo Micro Systems is considered among the companies that could secure business opportunities from these defence programmes.

Outlook

Although the fundraising announcement triggered a short-term decline in Apollo Micro Systems’ share price, the company remains well-positioned within India’s fast-growing defence manufacturing ecosystem.

The fresh capital could support capacity expansion, technology development and execution of future defence contracts.

With rising government spending on indigenous defence equipment and a strong order pipeline expected from upcoming procurement programmes, investors will closely monitor how Apollo Micro Systems deploys the newly raised funds to drive long-term growth.

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