Shares of Rama Steel Tubes Ltd., a prominent small-cap player, witnessed a significant rally of 12% on Monday, driven by the company’s announcement of a strategic entry into the renewable energy sector. This bold move signals the company’s diversification efforts and aligns with global sustainability trends.
The company informed the exchanges about the establishment of a wholly-owned subsidiary, ONIX IPP Pvt. Ltd., with an authorised capital of ₹1 lakh. This new entity will spearhead Rama Steel Tubes’ operations in the renewable energy domain, focusing primarily on green and sustainable energy solutions. In an exchange filing, the company revealed that its Acquisition and Allotment Committee approved the incorporation of the subsidiary with an initial 10% investment. The subsidiary aims to drive innovative energy solutions, contributing significantly to India’s clean energy transition.
This development follows Rama Steel Tubes’ recent collaboration with Onix Renewable Ltd., which involves supplying steel structures and single-axis trackers for solar energy projects. The company has also developed specialised steel structures and tracker tubes, essential components in solar installations, and has plans to expand into dual-axis tracker technology. Adding to its growth narrative, the company issued bonus shares in 2024 at a ratio of 1:2, building on last year’s 1:4 issuance. However, the promoter shareholding has seen a decline, standing at 47.96% in the September quarter, down from 56.33% in June 2024. The stock, which touched an intraday high of ₹13.53, has seen a 12% gain this year, reflecting investor optimism. With a market capitalisation of ₹2,093 crore, Rama Steel Tubes is firmly positioning itself at the intersection of infrastructure and sustainability, bolstering its future growth prospects.
