Rama Steel Tubes approves Rs 446.40 Cr Preferential Issue & Acquisition Amendment
Rama Steel Tubes approved a ₹40 crore warrant issue to promoters and a ₹140 crore preferential equity issue. The company also approved a ₹166.40 crore preferential equity issue for acquiring a 21.62% stake in Automech Group. Authorised share capital will increase from ₹200 crore to ₹250 crore. The SPA for Automech acquisition was amended, extending the completion date to December 15, 2026.
The substantial fundraising through preferential allotment and warrants, along with the amendment to a significant acquisition agreement, will have a material impact on the company's capital structure and strategic direction.
The company is undertaking significant fundraising activities through preferential issues and warrants, and amending an acquisition agreement which indicates strategic growth initiatives. The increase in authorized capital also supports future expansion.
Rama Steel Tubes Limited's Board of Directors, in a meeting held on September 22, 2026, approved several key corporate actions.
Firstly, the Board sanctioned an increase in the company's Authorised Share Capital from ₹200 crore to ₹250 crore, comprising 250 crore equity shares of ₹1 each. This necessitates an alteration to the Capital Clause of the Memorandum of Association, pending shareholder approval.
Secondly, amendments were approved for the Share Purchase Agreement (SPA) dated December 11, 2025, related to the joint acquisition of 100% stake in Automech Group Holding Limited. Rama Steel Tubes Limited and its wholly-owned subsidiary, RST International Trading FZE, are jointly acquiring Automech Group. The amendment extends the completion date for this transaction to December 15, 2026.
Thirdly, the Board approved the issuance of equity shares on a preferential basis. This includes up to 28 crore equity shares at ₹5 each (including a premium of ₹4), aggregating up to ₹140 crore, to Promoter/Promoter Group and Non-Promoter categories. Additionally, up to 33.28 crore equity shares at ₹5 each, aggregating up to ₹166.40 crore, will be issued for consideration other than cash, specifically towards acquiring 21.62% shareholding in Automech Holding Group from Mr. Jagjit Gouri.
Fourthly, the company approved the issuance of up to 8 crore warrants, convertible into equity shares, at ₹5 per warrant (including a premium of ₹4), aggregating up to ₹40 crore. These warrants are to be issued to the 'Promoter' category on a preferential basis for cash consideration.
The Board also approved convening an Extraordinary General Meeting (EGM) to seek member approval for these proposals. The Board meeting commenced at 4:15 p.m. and concluded at 05:05 p.m.
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Rama Steel Tubes Limited filed this with the NSE as a statutory disclosure, categorised under other corporate actions. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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