Shares of Apollo Micro Systems Ltd shot up 7% on 5 May after the company announced acquiring the entire 100% stake in IDL Explosives Ltd for a total consideration of Rs 107 crore via an all-cash deal. 

The acquisition is expected to be completed in the next two or three months. 

IDL Explosives, a subsidiary of GOCL Corp Ltd., specializes in producing and supplying packaged and bulk explosives primarily used in mining and infrastructure sectors. For FY24, the company reported revenue of ₹623 crore.

Apollo Micro Systems’ acquisition of IDL Explosives is expected to bring several strategic advantages:

• Strengthen its portfolio by consolidating high-value core defence assets and expertise.
• Enable entry into adjacent advanced sectors such as precision-guided munitions, loitering systems, warheads, and autonomous weapons platforms.
• Improve profit margins through cost savings and operational efficiencies via vertical integration.
• Boost capabilities to take on larger and more complex defence projects.
• Expand its addressable market and enhance its presence in high-growth regions like East and West Africa, the Middle East, and Southeast Asia.

Apollo Micro Systems forecasts the global explosives market to grow at a CAGR of 8.8%, reaching $9.37 billion by FY29. The company attributes this growth to increasing defence expenditures by nations such as the USA, China, India, Russia, the UK, and France.

At 2:59 pm, the shares of Apollo Micro Systems were trading 7.80% higher at Rs 125.47 on NSE.

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