Astra Microwave Products Limited announced that its Board has given in-principle approval to explore a demerger of its Space, Meteorology, and Hydrology business into a separate, independently listed entity, tentatively named Astra Space Technologies Private Limited (ASTPL). The existing entity will focus exclusively on Defence and Aerospace. The strategic move aims to unlock shareholder value, sharpen operational focus, and attract capital tailored to the high-growth NewSpace sector, targeting a listing by Q1 of FY28.
Strategic Decision to Split Business Verticals
Astra Microwave Products Limited, a leading Defence electronics company, has sanctioned the exploration of a major restructuring plan. The Board approved the demerger of the Space, Meteorology, and Hydrology (SMH) division into a new, separate listed company. This initiative is designed to create two distinct, focused entities to capitalize on specific sector dynamics.
The Two Resulting Companies
Upon completion, the corporate structure will comprise:
- Astra Microwave Products Limited (The Original Entity): This entity will pivot to focus exclusively on the Defence and Aerospace market, operating as a pure-play player, while retaining stakes in existing Joint Ventures.
- Astra Space Technologies Private Limited (ASTPL): The new entity will house all Space, Meteorology, and Hydrology businesses. It is proposed to be independently listed on both the BSE and NSE, featuring mirror shareholding identical to the parent company.
Rationale for the Demerger
The separation is fundamentally aimed at maximizing shareholder value and improving strategic execution across verticals. Key anticipated benefits include:
- Enabling a sharper strategic and operational focus for each specialized business.
- Allowing management teams to pursue sector-specific growth strategies tailored to Defence versus NewSpace.
- Improving corporate oversight, governance, and accountability.
- Broadening the investor base by offering distinct investment propositions reflective of each sector’s risk and growth profile.
Focus on High-Growth Space Market
The SMH business, soon to be ASTPL, is recognized as a highly scalable, profitable, and high-growth opportunity, driven by strong demand for satellite design, assembly, and data applications globally. Astra’s Space Group has established a reputation over 20 years for certified, technically deep, and cost-competitive space hardware manufacturing. The company anticipates that the demerger will provide the structural clarity needed to attract significant capital and talent required for scaling its NewSpace solutions.
Transaction Implications and Timeline
The transaction is expected to be value accretive over the medium to long term through clearer capital allocation and enhanced operational efficiencies. The transfer of the SMH business to ASTPL will occur on a going-concern basis to ensure operational continuity. The process requires several key approvals, including final Board approval, shareholder and creditor consent, and sanction from the National Company Law Tribunal (NCLT).
The company currently targets the completion of the demerger and the listing of ASTPL by the first quarter of FY28, provided all necessary regulatory approvals are secured timely. Management confirmed that during the transition, no interruption to business operations, employees, customers, or partners is anticipated.
Source: BSE
