Apollo Micro Systems shares gain 3% on 15-year defence license; key details

Shares of Apollo Micro Systems Ltd climbed in Tuesday’s trade after the Hyderabad-based defence player announced it has secured a 15-year license from the government to manufacture defence equipment, including unmanned aerial systems and radar technologies.

The stock rose as much as nearly 3 per cent in early trade to touch the day’s high of Rs 276.35 over its previous close of Rs 268.35 apiece. The company commands a market cap of Rs 9,208 crore.

The buying sentiment was triggered after the company informed the bourses that it has received approval from the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India. The license authorizes the company to manufacture items under the "Industrial Explosives and Manufacturing" category, specifically targeting high-tech defence applications.

According to the regulatory filing, the license covers the "Manufacturing of equipments under Categories of Defence Aircraft for Unmanned Helicopters activity which includes Unmanned Aerial Systems." Additionally, it grants clearance for "Allied Defence Equipment for Inertial Navigation Systems and Radar Equipments."

Highlighting the strategic importance of this approval, the company stated in its filing that "The License is prerequisite for the Present and Upcoming manufacturing opportunities with Ministry of Defence (MoD)."

Beyond drones, the 15-year validity license strengthens Apollo's position in navigation and surveillance. The firm is working on MEMS-based Inertial Navigation Systems, Fiber Optic Gyro (FOG), and Ring Laser Gyro (RLG) systems. It also allows for the "manufacture complete Radar Equipment along with all associated and allied subsystems integral to radar technology," the filing added.

The company revealed it is currently developing multiple UAS platforms and collaborating with partners for "logistics and delivery UAV systems as well as offensive/attack-class unmanned systems." These projects are reportedly "progressing as per schedule and are expected to enter field trials within the next two quarters."