Rama Steel Tubes Limited has made a significant move in its capital structure by approving the allotment of 7,77,77,778 equity shares to two non-promoter entities. The Acquisition and Allotment Committee of the company's Board of Directors approved this decision on September 23, 2025.

Key Details of the Allotment

• Issue Price: The shares were allotted at Rs 11.25 per share on a preferential basis.
• Allottees:
  1. EBISU GLOBAL OPPORTUNITIES FUND LIMITED: Received 4,00,00,000 shares (2.44% stake)
  2. PINE OAK GLOBAL FUND: Received 3,77,77,778 shares (2.31% stake)

Regulatory Approvals and Capital Structure Impact

The allotment follows key regulatory approvals:

• Shareholder approval through an Extraordinary General Meeting (EGM) on June 18, 2025
• In-principle approval from both BSE Limited and National Stock Exchange of India Limited (NSE) dated September 08, 2025

As a result of this allotment, Rama Steel's paid-up equity share capital has increased to Rs 163,60,40,979, divided into 163,60,40,979 equity shares with a face value of Rs 1 each.

Financial Implications

• The total amount raised through this preferential issue is approximately Rs 87.50 crore.
• The new equity shares will rank pari-passu with the existing equity shares of the company.

Market Impact

This significant equity infusion from non-promoter entities could potentially strengthen Rama Steel's financial position and provide capital for growth initiatives. The preferential allotment has increased the company's equity base by about 4.75%, which may have implications for its equity structure and future financial strategies.

Investors and market watchers will likely keep a close eye on how Rama Steel utilizes this fresh capital infusion and its impact on the company's future performance and market position in the steel tubes manufacturing sector.

Rama Steel Tubes Limited (RSTL) has announced its financial results for the first quarter, revealing a mixed performance with strong revenue growth but a decline in profitability metrics.

Revenue Growth

The company reported a significant increase in revenue for Q1. Total revenue, including other income, rose to ₹2,536.52 crore, marking a substantial 58.70% year-on-year growth compared to ₹1,598.36 crore in the same quarter of the previous year.

Sales Volume Expansion

RSTL witnessed a robust expansion in sales volume, which grew by 60.87% year-on-year to 45,638.22 tons, up from 28,370.01 tons in the same quarter of the previous year.

Profitability Metrics

Despite the strong top-line growth, the company experienced a decline in some key profitability metrics:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) decreased to ₹115.09 crore, compared to ₹114.00 crore in the same period last year.
• EBITDA margin compressed significantly to 4.54% from 7.13% year-on-year.
• Profit After Tax (PAT) including Other Comprehensive Income (OCI) increased to ₹64.54 crore, showing a 140.55% growth compared to ₹26.83 crore in the same quarter of the previous year.

Quarterly Performance

On a quarter-on-quarter basis, RSTL showed some improvements:

• Total revenue increased by 5.75% from ₹2,398.71 crore in the previous quarter to ₹2,536.52 crore.
• EBITDA rose by 15.03% compared to the previous quarter.
• PAT margin including OCI improved by 45.42% quarter-on-quarter.

Management Commentary

Mr. Richi Bansal, Executive Director & CEO of Rama Steel Tubes Limited, commented on the results: "RSTL has delivered steady growth in volumes despite the volatile operating environment. The volume growth shows steady demand in different sectors. The increase in EBITDA and net profit is attributed to higher demand for our products and better price realizations."

Strategic Developments

During the quarter, RSTL made several strategic moves:

1. Incorporated a wholly-owned subsidiary, Rama Defence Private Limited, to venture into the defence sector.
2. Acquired a 24.80% stake in Bigwin Buildsys Coated Private Limited, making it an associate company.
3. Issued 15,76,00,000 equity shares on a preferential basis to non-promoters at ₹11.25 per share.

Outlook

While Rama Steel Tubes Limited has shown strong revenue and volume growth, the decline in EBITDA margin indicates challenges in maintaining profitability. The company's efforts to diversify into the defence sector and strengthen its market position through strategic investments may help in navigating the competitive landscape going forward.

Investors and analysts will be watching closely to see if RSTL can improve its profitability metrics while maintaining its growth trajectory in the coming quarters.