Apollo Micro Systems Ltd. Board Approves issuance of Convertible Warrants worth Rs. 185

Apollo Micro Systems Ltd. Board Approves issuance of Convertible Warrants worth Rs. 185 Cr to Mr. Karunakar Reddy Baddam (Promoter group), and Nextpact Ltd, Mauritius, Maybank Securities Pte. Ltd., (Non-Promoter group) among others at a price of Rs. 183.30 each.

by Shrutee K

BSE and NSE listed Apollo Microsystems Ltd is an electronic, electro-mechanical, engineering designs, manufacturing and supplies company. It is involved in design, development and sale of high-performance, mission and time critical solutions to defence, space and home land security of the defence ministry, government controlled public sector undertakings, and private sectors. 

That apart, the company has also participated in several indigenous missile programmes, underwater electronic warfare, underwater missiles, surface to air missiles, nuclear missile programmes, surface to surface missile programmes, indigenous submarine programmes, UAV’s long and short endurance, ships, and space programmes. In the past one month, the stock has outperformed market as shares surged 25 per cent, as against 4.4 per cent decline in the S&P BSE Sensex. Moreover, in the past three months, the stock soared 55 per cent, as compared to 7 per cent rise in the benchmark index. Recently, the rating agency Acuité reaffirmed its long-term and short term rating of the bank facilities Apollo Micro Systems with 'stable' outlook. The rating reaffirmed, followed significant improvement in business risk profile and healthy revenue growth in FY22, backed by continued healthy operating margin. Highlighting the rationale behind upgrade, Acuité said, "Apollo Micro Systems operates in niche segment of high entry barrier defence and aerospace industry, and the client profile comprises of mostly government organizations, with repeat orders received over the years, which mitigates the counter party credit risk to a large extent." The company is certified by the ‘Centre for Military Airworthiness and Certification (CEMIAC)’, whereby it is an approved design house for design and development of software and equipment for military aircraft application. This certification is based on technical experience and past record of such authorised design houses. Apollo Micro Systems deals with reputed clientele like Bharat Dynamics Limited, Bharat Electronics Limited, Defence Research and Development Organisation (DRDO) among others. As of June 30, 2022, AMSL has an unexecuted order book position of Rs 280 crore. "With high entry barrier coupled with long term nature of contracts of the order book provides revenue visibility over the medium term. Further, AMSLs growth prospects remain healthy, supported by the Indian Government’s focus towards indigenisation in the defence sector amid the Make in India thrust," the rating agency added.