Shares of Rama Steel Tubes Ltd. surged by up to 12% on Monday after the company announced the establishment of a new subsidiary in the renewable energy sector. The new unit, ONIX IPP Pvt. Ltd., is a wholly owned subsidiary with an authorised capital of ₹1 lakh, and it will focus on green and renewable energy projects in India.
The announcement, which came via an exchange filing, outlined that Rama Steel Tubes will invest 10% in the subsidiary’s share capital. This new venture marks the company’s strategic move into the burgeoning renewable energy space, which is increasingly seen as a high-growth sector. The launch of ONIX IPP Pvt. Ltd. is a significant step for Rama Steel Tubes, aligning with the company’s previous efforts in the renewable energy sector. Recently, the company partnered with Onix Renewable Ltd. to supply steel structures and single-axis trackers for solar projects, with plans for future expansion into dual-axis trackers.
Additionally, Rama Steel Tubes has been actively engaging in shareholder rewards, issuing bonus shares in 2024 (one for every two shares held), following a similar issuance in 2023 (one for every four shares). These moves are seen as efforts to boost investor sentiment and provide value to existing shareholders. As of the latest trading session, the stock reached an intraday high of ₹13.53, reflecting the market’s positive reception to the company’s new strategic direction. Rama Steel Tubes’ market capitalisation now stands at ₹2,093 crore, with its stock up 12% year-to-date. Rama Steel Tubes has also seen a gradual shift in ownership. According to the September quarter shareholding pattern, promoter holdings decreased to 47.96% from 56.33% in June 2024, indicating some level of public participation in the company’s growing operations.
