Apollo Micro Systems is close to finalising a major acquisition deal to buy Premier Explosives for an estimated sum between ₹2,300 crore and ₹2,500 crore.

The valuation includes the cost of an open offer to minority shareholders of Premier Explosives, according to individuals familiar with the matter. A board meeting of Premier Explosives has been scheduled today to deliberate on the proposal.

Both Apollo Micro Systems and Premier Explosives are headquartered in Hyderabad, making this a significant consolidation within India’s defence manufacturing hub.

Apollo Micro Systems is known for producing a wide range of defence-related equipment that supports India’s indigenisation and modernisation programs. Its portfolio includes naval mines and critical components for missile systems, reflecting its growing role in strengthening India’s strategic capabilities.

Premier Explosives, on the other hand, specialises in manufacturing explosives for both defence and industrial applications. Its products include TNT (Trinitrotoluene) and missile propellants, which are vital for India’s missile and munitions programs.

The promoters of Premier Explosives currently hold around 40 per cent of the company’s stake, which was recently transferred to a trust from individual ownership, signalling a restructuring of promoter holdings ahead of the potential acquisition.

Apollo Micro Systems has not responded to queries regarding the deal, nor has Premier Explosives. However, Apollo recently announced a substantial fund raise of ₹3,200 crore through the issuance of shares and warrants to promoter and non-promoter entities.

The funding round attracted participation from foreign portfolio investors, high net worth individuals, and institutional funds, providing Apollo with the financial muscle to pursue acquisitions such as this.

India’s defence expenditure continues to rise sharply, with government data projecting spending at ₹7.5 lakh crore for 2026–27. This figure is three times higher than a decade ago, underscoring the country’s commitment to modernising its armed forces. Defence exports have also crossed ₹35,000 crore, creating opportunities for private sector players to expand their footprint in both domestic and international markets.

The acquisition of Premier Explosives would position Apollo Micro Systems to integrate explosive manufacturing capabilities with its existing portfolio of defence systems. This synergy could enhance its competitiveness in supplying comprehensive solutions to the armed forces and potentially boost its export prospects.

The broader defence industry is witnessing similar moves by other private players. Adani Defence and Aerospace recently announced plans to ramp up investments, including a new project in Madhya Pradesh to manufacture TNT and propellants.

Adani has also partnered with Embraer to produce aircraft, while TATA has joint ventures with international giants such as Lockheed Martin and Boeing. These developments highlight the increasing role of private industry in India’s defence sector, which was traditionally dominated by public sector undertakings.

The potential acquisition of Premier Explosives by Apollo Micro Systems reflects the accelerating consolidation and expansion within India’s defence manufacturing ecosystem.

It also signals the growing confidence of private players in capitalising on rising defence expenditure and export opportunities, aligning with the government’s vision of self-reliance under the Atmanirbhar Bharat initiative.

Agencies