April 17 (Reuters) - Drone maker AEVEX's shares jumped 15% in their debut on the New York Stock Exchange on Friday, signaling growing investor appetite for defense-linked businesses as governments ramp up military spending amid persisting geopolitical tensions.
Modern warfare is being reshaped by the rise of unmanned drones, eclipsing conventional weapons in conflicts ranging from Ukraine's fight against Russia to wars across the Middle East.
Shares of the private equity-backed firm opened at $23.01
apiece, higher than the offer price of $20, giving it a valuation of $2.57 billion. Companies such as AEVEX are now finding a more receptive audience among institutional investors, who are looking to hedge against global instability.
The Solana Beach, California-based company sold 16 million shares to raise $320 million in its U.S. initial public offering on Thursday.
AEVEX provides airborne intelligence, surveillance and reconnaissance offerings to the U.S. government and its allied forces. It has two operating segments — tactical systems and global solutions.
Tactical Systems, AEVEX's core unit, builds autonomous defense technologies and contributes about 75% of to its total revenue. Global Solutions provides aircraft modification and engineering support across manned and unmanned platforms.
AEVEX relies heavily on the U.S. government, which accounted for 78% of its revenue in 2025, and expects that cuts or delays in U.S. or foreign government budgets could materially affect its revenue.
The company adds to the ranks of publicly traded unmanned aerial system makers, including Kratos Defense & Security Solutions and AeroVironment, as well as competes with private companies such as Anduril Industries and Shield AI.
Private equity firm Madison Dearborn Partners acquired a majority stake in AEVEX in March 2020 and holds 79.1% of the company's voting power, according to regulatory filings.
(Reporting by Pragyan Kalita and Pritam Biswas in Bengaluru; Editing by Shilpi Majumdar)
