Apollo Micro Systems shares rise over 1% as company nears Premier Explosives deal

Apollo Micro Systems shares rose 1% after the defence manufacturer was said to be nearing a deal to acquire Premier Explosives for Rs 2,300-2,500 crore, including the cost of an open offer to minority shareholders, ET reported.A board meeting of Premier Explosives is scheduled for today.Both Apollo Micro Systems and Premier Explosives are headquartered in Hyderabad.

The proposed deal, if completed, would bring together two defence-focused companies at a time when India’s defence spending and exports are rising sharply.Apollo Micro Systems makes defence equipment linked to India’s indigenisation and modernisation programmes.

Its products include naval defence mines and components used in missile systems.Premier Explosives makes explosives for defence and industrial use.

Its products include TNT and propellants used in missiles.

The company’s promoters own around a 40% stake.

Their stake was recently transferred to a trust, as it was earlier held by promoters in their individual capacities.Also Read: TCS shares dip 2% ahead of Q1 earnings today.

What can shareholders expect?Apollo Micro Systems announced a Rs 3,200 crore fundraise earlier this week through the issue of shares and warrants to promoter and non-promoter entities.

Several foreign portfolio investors, high net-worth individuals and funds are expected to participate in the funding.The proposed acquisition comes as private defence companies are drawing strong investor interest.

India’s defence expenditure for 2026-27 is estimated at Rs 7.5 lakh crore, according to government data, about three times the level seen a decade ago.

Defence exports have also crossed Rs 35,000 crore.This has opened up opportunities for private companies in areas such as ammunition, explosives, missile components, electronics, drones, naval systems and aerospace manufacturing.Several large private-sector groups have also stepped up their defence plans.

Adani Defence and Aerospace has announced investments in the sector and recently inaugurated a project in Madhya Pradesh to manufacture TNT and propellants.

Tata Group companies are also working through joint ventures with global defence majors such as Lockheed Martin and Boeing.For Apollo Micro Systems, buying Premier Explosives would expand its presence from defence electronics and systems into explosives and propellants, giving it a wider role in the defence manufacturing chain.The deal would also come at a time when the government is pushing domestic manufacturing in defence and seeking to reduce import dependence.

Companies with approved products, manufacturing capacity and defence order pipelines are likely to remain in focus as spending rises.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own.

These do not represent the views of the Economic Times.) ...