Rama Steel Tubes Limited (RSTL), a prominent manufacturer and exporter of ERW steel tubes, has announced key decisions from its Board meeting held on December 10, 2024. The Board has approved the acquisition of a 24.81% stake in Bigwin Buildsys Coated Private Limited for a total consideration of ₹7.51 crore. The transaction will be carried out via the issuance of fresh equity shares of Rama Steel Tubes Limited.
Key Highlights of the Acquisition
- Acquisition Details:
Rama Steel Tubes will subscribe to fresh equity shares of Bigwin Buildsys Coated Private Limited, a company engaged in pre-engineered steel building solutions and solar MMS (Module Mounting Structures). The deal aligns with RSTL’s strategy to diversify into green energy solutions, particularly in the solar infrastructure space. - Consideration:
The stake acquisition will involve a preferential issue of 53,65,329 equity shares of Rama Steel Tubes at a price of ₹14 per share. This issuance is subject to shareholder approval at the company’s upcoming Extraordinary General Meeting (EGM) on January 4, 2025. - Rationale for the Acquisition:
The move to acquire Bigwin Buildsys Coated Private Limited underscores Rama Steel Tubes’ diversification strategy into green energy solutions and sustainable infrastructure. This transaction is expected to bolster RSTL’s position in the growing renewable energy market. - Background of Bigwin Buildsys Coated Pvt. Ltd.:
- Established: December 30, 2019
- Line of Business: Pre-engineered steel buildings and solar MMS structures
- Turnover: ₹23.25 crore (FY 2023-24)
- Country of Operations: India
Details of Preferential Issue
The Board has also approved the preferential issuance of equity shares to facilitate this transaction. The key details include:
- Number of Shares: Up to 53,65,329 equity shares
- Issue Price: ₹14 per share, in line with SEBI’s ICDR (Issue of Capital and Disclosure Requirements) Regulations, 2018
- Allottee: Bigwin Buildsys Coated Private Limited
Next Steps
The company will seek shareholder approval for the preferential issuance and acquisition at the EGM scheduled for January 4, 2025. The e-voting period for shareholders will commence on January 1, 2025, and end on January 3, 2025.
Impact on Rama Steel Tubes’ Growth Strategy
Commenting on the development, Rama Steel Tubes emphasized that the acquisition is a strategic step toward expanding its portfolio in the green energy infrastructure sector, specifically solar MMS structures, a critical component in renewable energy installations.
This move reflects the company’s vision to diversify beyond its core ERW steel tube business while leveraging the increasing demand for solar and pre-engineered building solutions in India.