Apollo Micro Systems to raise ₹3,322 crore for Premier buyout
Indian defence contractor Apollo Micro Systems will raise ₹3,322 crore through a preferential share issue to fund its all-cash acquisition of a controlling stake in Premier Explosives, a move aimed at vertically integrating its aerospace and defence manufacturing capabilities.
Apollo Micro Systems plans to raise ₹3,322 crore through a preferential equity issuance to finance its acquisition of a 41.33% stake in Premier Explosives. The Indian defence contractor agreed to buy the promoter-held stake in the high-energy materials manufacturer for nearly ₹1,550 crore in an all-cash transaction. The capital raise and acquisition details were disclosed in separate exchange filings on July 9 and July 11.
The funding structure relies on convertible instruments alongside direct equity, with both shares and warrants priced at ₹416.60 per unit. Apollo will issue 2,28,30,902 equity shares worth ₹951.13 crore to 55 investors, alongside 5,69,15,380 warrants aggregating ₹2,371.09 crore to 93 investors. Holders can convert each warrant into a single fully paid-up equity share with a face value of ₹1 within 12 months of the allotment date.
For market participants, the strategic rationale centers on vertical integration within India's defence supply chain. While Apollo focuses on defence systems, Premier Explosives manufactures critical components such as rocket motors, countermeasures, and munitions for aerospace applications. Combining these operations allows Apollo to pair its systems expertise directly with Premier's high-energy materials.
The transaction carries a lengthy execution timeline, with completion expected by the quarter ending December 2026. This extended period reflects the complexity of securing regulatory clearances, shareholder approvals, and customary closing conditions required for a deal of this size. Once finalized, Premier Explosives will continue to operate under its existing brand while leveraging the scale of its new parent company.
Apollo's stock performance highlights the market's prior enthusiasm for its growth trajectory, even as short-term volatility persists. The shares have slipped 9.22% over the past week but remain up 2.64% over the past month with a 48% year-to-date return. Long-term shareholders have seen substantial gains, with the stock rising 119.14% over the past year and 3,525% over five years.
