Apollo Micro Systems Stock Plummets as Profit Booking Hits Defense Ancillary Firm After Rs 3,322 Cr Fundraise Approval

Apollo Micro Systems Stock Plummets as Profit Booking Hits Defense Ancillary Firm After Rs 3,322 Cr Fundraise Approval​

Apollo Micro Systems saw a significant downturn in its share price on Tuesday, declining by over 5 percent. The fall follows the company's announcement of a major fund-raising plan, which reportedly led investors to book profits after the stock had recently rallied. The defence electronics firm is one of the stocks seeing considerable volatility as it manages this capital expansion.

The decline placed Apollo Micro Systems among the top losers on the BSE Smallcap index. Investors reacted negatively following the news of the board approving the fund-raising proposal. Despite the recent drop, the stock remains strong year to date, trading approximately 45 percent higher in 2026. This performance stands in sharp contrast to the Nifty 50, which is showing a decline of around 6.5 percent over the same period.

Board Approves Massive Rs 3,322 Crore Fundraise Through Equity and Warrants​

The company's board has approved plans to raise up to Rs 3,322 crore through two methods: preferential allotment of equity shares and convertible warrants. This capital injection is aimed at supporting the business operations and future growth initiatives of the defence electronics firm.

Under the equity component, Apollo Micro Systems will issue up to 2.28 crore shares at a price point of Rs 416.60 per share. This issuance aims to raise around Rs 951 crore. Notable allottees for this portion include Saint Capital Fund and Tata Mutual Fund.

For the convertible warrants, the company plans to issue up to 5.69 crore warrants at Rs 416 per warrant. These warrants are expected to bring in up to Rs 2,371 crore. Promoter family members Chanakya Reddy Baddam and Kanishka Reddy Baddam will receive a portion of these warrants.

Stock Volatility Follows Defence Procurement Successes​

The current stock volatility is set against a backdrop of strong governmental defense commitments. Previously, the company experienced a rally following the Defence Acquisition Council's approval of acquisition proposals valued at around Rs 52,000 crore for the armed forces. These programs include specialized items such as the AKASH TARANG Anti-UAV Electronic Warfare System and Multi-Influence Ground Mines.

Apollo Micro Systems is widely regarded as one of the potential beneficiaries of these crucial procurement programmes. The stock's current movement reflects investor reactions to both the defense contracts and the newly disclosed capital raising plan.

Investor Vote Scheduled For August 4​

The company has scheduled an extraordinary general meeting for August 4 to address the fund-raising proposals. Investors who held shares as of July 28 will be eligible to participate in the voting process at this meeting. This EGM is set to provide shareholders a platform to weigh in on the proposed capital structure changes.