Apollo Micro Systems Shares Plunge Over 5% as Profit Booking Hits Stock Ahead of Fund Raise

Apollo Micro Systems Shares Plunge Over 5% as Profit Booking Hits Stock Ahead of Fund Raise​

Apollo Micro Systems saw its stock fall by over 5 percent on Monday, as investors booked profits following a two-day rally. The decline comes ahead of the company's board meeting, during which it is expected to consider a proposal for raising funds through the issuance of equity shares and/or convertible securities.

Stock Correction Amid Profit Booking​

The stock price declined sharply on Monday trading, settling at Rs 423.55 per share on the NSE. This pullback follows the recent rally, where the share had gained more than 7 percent across the previous two trading sessions. The profit-taking movement suggests a temporary easing of buying momentum in response to the company's future capital needs.

Rally Driven by Defence Acquisition Council Approval​

The prior two-day surge was directly linked to the announcement by the Defence Acquisition Council (DAC). This council granted Acceptance of Necessity (AoN) for various acquisition proposals intended for the armed forces, with an estimated total cost of around Rs 52,000 crore.

For the Indian Army specifically, the approved procurements include several critical defence systems. These systems range from the Anti-Unmanned Aerial Vehicles (UAV) Electronic Warfare System 'AKASH TARANG' and Man Portable Anti-Tank Guided Missile (MPATGM) Systems to Medium Range Surface-to-Air Missile (MRSAM) Weapon System, Very Short Range Air Defence System (V-SHORADS), Active Protection System for Tanks and Jet-Based Kamikaze Drone System.

Future Growth Plans Highlighted by New Manufacturing Facility​

Beyond the defence contract news, Apollo Micro Systems is also expanding its operational footprint. The company recently announced plans to invest Rs 300 crore to establish a new manufacturing facility in Telangana. This initiative underscores the firm's commitment to scaling up its advanced production capabilities.

The company has already taken steps to secure land for this major project. An exchange filing confirmed that Apollo Micro Systems acquired a 22,988-square metre land parcel at TSIIC Hardware Park Phase II in Hyderabad. The proposed facility is designed to manufacture crucial electronics and electro-mechanical systems.