In an exchange filing, the defence electronics player said the move involves the creation of Astra Space Technologies Private Limited, an independent company exclusively dedicated to its space, meteorology and hydrology business verticals. The new entity is expected to adopt tailored growth strategies and capital allocation frameworks aligned with the sector’s specific requirements.
The company added that the demerger would help broaden its investor base by offering distinct investment propositions, while also reducing structural complexity and enhancing transparency. The restructuring is aimed at improving oversight, governance and overall accountability.
What does it mean for shareholders?
The demerger will lead to unlocking value for the shareholders of the company, it added. It however has not yet informed about the demerger ratio or the applicable dates of the demerger.“The Board believes that creating two focused platforms will position each entity to capitalise on emerging opportunities in their respective sectors, both in India and globally. The Company expects the transaction to be value accretive over the medium to long term by enabling MORE FOCUSED GROWTH OPPORTUNITIES, clearer capital allocation strategies and improved operational efficiencies,” Astra Microwave said.
Live Events
The space and weather business represents a “scaled up profitable high growth opportunity” for the company, driven by the expanding demand for satellite design, assembly and satellite data application in both domestic and international markets, it added.
The new company named Astra Space will offer a “profitable and integrated play across the entire gamut of upstream hardware, midstream integration and downstream data applications”, Astra Microwave said, adding that it is capital intensive and execution-dependent, and hence requires focused management attention for its significant growth prospects.
“The success of Astra Space Technologies Private Limited will depend on its ability to scale technical capabilities, enhance leadership bandwidth, and expand its satellite-related offerings and solutions,” it added.
Proposed post-demerger structure
After the completion of the demerger, this will be the proposed structure:
- Astra Microwave Products will continue to focus on the defence and aerospace market and retain its stake in the existing JV companies. It will also continue to manage its wholly-owned subsidiaries and operate as a pure-play defence and aerospace company.
- Astra Space Technologies Private Limited (ASTPL) will house the space, meteorology and hydrology businesses and operate as an independently listed entity. It will have mirror shareholding identical to that of Astra, and will be listed on stock exchanges BSE and NSE.
Astra Microwave will transfer the space, meteorology and hydrology business to Astra Space on a going-concern basis, ensuring operational continuity. “The Board has authorised management to consult with subject experts on this matter for consideration by the Audit Committee and the Board. The Audit Committee shall appoint a Registered Valuer to determine the share exchange ratio for the proposed demerger, finalise the structure of the proposed demerger, including identification of assets, liabilities, contracts, employees and other matters forming part of the Space, Meteorology and Hydrology business undertakings; and to do all such acts, deeds, matters and things as may be necessary, proper or expedient for the purpose of giving effect to this resolution,” the company said.
However, the demerger will require a string of approvals before coming into effect. These include final approval from the board of directors, shareholders, creditors, stock exchanges, along with NCLT sanction and other regulatory clearances.
Astra Microwave clarified that the board has only given an in-principle approval during its meeting held today. The final decision on the proposed demerger, including its structure, share exchange ratio, and other terms, shall be taken by the board after receiving required reports and expert opinions.
Astra Microwave aims to complete the demerger by the first quarter of FY28 (April-June, 2027).
The shares of the company are down around 2% to trade at Rs 974.60, as seen at 2.30 pm. The stock briefly came into the green immediately after the announcement before erasing all gains and slipping into the red.