Solar Penny Stock Under Rs 15: Company Steps into Renewable Energy with Stake in 225 MW PM-KUSUM Solar Power Project
The stock is up by 64 per cent from its 52-week low of Rs 8.41 per share and gave multibagger returns of 3,535 per cent in 5 years whereas the BSE Sensex Index is up by 140 per cent.
On Friday, shares of Rama Steel Tubes Ltd surged 4.47 per cent to Rs 13.80 per share from its previous closing of Rs 13.21 per share. The stock’s 52-week high is Rs 17.51 and its 52-week low is Rs 8.41. The shares of the company saw a spurt in volume by more than 11 times on the BSE.
Rama Steel Tubes Limited (RSTL), a prominent manufacturer of steel tubes and pipes, has announced a significant strategic investment, marking its entry into the renewable energy sector. The company has joined as a Joint Venture (JV) partner in a 225 MW solar power project under the Government of India’s PM-KUSUM scheme. This project, structured under Onix IPP, a Special Purpose Vehicle (SPV), is spread across various locations in Maharashtra. Crucially, Power Purchase Agreements (PPAs) have been successfully signed with the Maharashtra State Electricity Distribution Company Limited (MSEDCL) at a fixed tariff of Rs 3.04 per unit for a substantial 25-year term.
Financially, the project is robust. The total estimated annual gross revenue for the SPV is Rs 1,081.13 million, translating to a total revenue of Rs 27,028.13 million over the 25-year PPA period, ensuring clear revenue visibility. RSTL, holding a 10 per cent equity stake in Onix IPP, stands to gain significantly. Its share in the gross revenue per annum is estimated at Rs 108.11 million, leading to a total projected revenue of Rs 2,702.81 million for RSTL over the 25 years. This participation is expected to provide stable, long-term returns from the green energy sector, adding a new dimension of sustainability-linked revenue to RSTL's business portfolio.
This strategic move carries significant importance, aligning with the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) initiative, which promotes solar energy generation on barren and government lands. Beyond its financial benefits, the project actively supports rural development through the creation of new energy infrastructure, empowering local economies, and strengthening India's commitment to clean energy. RSTL's entry into this rapidly expanding renewable energy sector underscores its dedication to Environmental, Social, and Governance (ESG) goals.
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About the Company
Established in 1974, Rama Steel Tubes Ltd (RSTL) has been a pioneering steel tube manufacturer in India for 50 years. The company offers a wide range of steel products, including pre-galvanised tubes, Structural Tubes, MS Black and galvanised tubes, and Hollow Sections, establishing itself as a leading brand in the Indian steel industry. With state-of-the-art manufacturing facilities located in four different areas, Rama Steel Tubes is dedicated to bolstering India's infrastructure.
The company have a market cap of over Rs 2,100 crore and has delivered good profit growth of 25.7 per cent CAGR over the last 5 years. The stock is up by 64 per cent from its 52-week low of Rs 8.41 per share and gave multibagger returns of 3,535 per cent in 5 years whereas the BSE Sensex Index is up by 140 per cent.
Disclaimer: The article is for informational purposes only and not investment advice.