In a significant move, Rama Steel Tubes has greenlit the issuance of two bonus shares for each share held by its shareholders, marking the third occasion of such approval within the past seven years. This bonus issue, totaling ₹2,500 crore, comes on the heels of previous instances in March 2016, where the company sanctioned four bonus shares for each share, and January of the preceding year, which saw an additional issuance of four free shares per share.
The company’s filing to the exchange notes that the record date for the bonus share issuance will be determined in due course, providing shareholders with clarity on the timeline for the distribution.
In a parallel development, the board of Rama Steel Tubes has given the nod to an increase in authorized share capital from ₹55 crore to ₹200 crore, reflecting the company’s strategic considerations and growth plans.
However, the board has also decided to rescind the proposal for the Scheme of Arrangement for the amalgamation of Lepakshi Tubes Pvt. Ltd. with Rama Steel Tubes. The filing attributes this decision to the profound changes in market conditions post the pandemic, along with significant shifts in the global steel industry during this period. The company acknowledged the need to reconsider the merger in light of the volatile market conditions.
Rama Steel Tubes’ shares are currently locked in an upper circuit of 5% at ₹47.70, showcasing the market’s positive response to the bonus issue announcement. The stock has already surged 32% in January, building on an 8.3% gain in the entirety of 2023. Prior to that, Rama Steel Tubes witnessed remarkable growth, with shares rising 145% in 2022 and over 600% in 2021.
