The Hyderabad-based defense hardware supplier, Apollo Micro Systems\u2019 IPO to raise up to Rs 156 crore got subscribed by 8.9 times as at the end of second day of issue, backed by strong demand from retail investors. The issue received bids for 3,66,96,000 shares as against the issue size of 41,44,955 implying subscription of 8.99 times. Notably, retail investors bid for a total of 3.19 crore shares as against 21.09 shares reserved for them, implying demand to the tune of 15.14 times. The next highest demand was registered by the employee category who bid for a total of 1.96 lakh shares as against 20,000 shares reserved for them, implying demand of 9.8 times. QIBs too lapped up the shares and as their portion was subscribed by more than 3 times, as investors from the category bid for a total of 37.42 lakh shares as against 11.5 lakh shares reserved for them, implying demand of more than 3 times. The Non-institutional investor portions was subscribed by 0.62 times. The company has set a price band of Rs 270-275 for the issue, and looks to raise upto Rs 156 crore at the higher end of the band. The company looks to sell 56,72,727 equity shares (of which Employee reservation of upto 20,000 eq sh), in a fresh issue. Apollo Micro Systems will offer a Rs 12 discount to employees and retail investors. The issue will remain open for subscription from 10th January to 12th January 2018. The lot size is fixed at 50 shares and in multiples of 50 shares thereafter. \u00a0The company will dilute 27.4% (at upper price band) of its post-offer paid-up equity share capital. A few brokerages had advised investors to subscribe to the issue, given the long-term fundamentals of the company. \u201cIn terms of valuations, the pre-issue P\/E works out to 29x 1HFY2018 annualized earnings (at the upper end of the issue price band), which is lower compared to its peers like Astra Microwave (trading at 36.2x its 1HFY2018 annualized earnings). Further, AMSL has strong financial record and return ratios compared to Astra Microwave. Hence, considering the above positive factors, growth in the defence industry we recommend SUBSCRIBE on the issue,\u201d Angel Broking said. Pointing to the strengths of the company, HDFC Securities says that the company has a proven track record in developing new technological systems and order execution; recurring orders from existing programs; strong R&D capabilities; qualified and experienced workforce & senior management. Notably, the company has registered strong numbers both on the top-line and bottom-line fronts CAGR of ~43% and ~52% respectively over FY2014-17, backed by healthy growth in order book and improvement in margin.