Societe Generale Picks Up Stake In Rama Steel Tubes, Scrip Up 150% In 1 Yr

Rama Steel Tubes Ltd. (RSTL) (BSE: 539309, NSE: RAMASTEEL) is a pioneer and a leading manufacturer of steel pipes, G.I. pipes and tubes in India. As per bulk deal data available on BSE, Societe Generale picked up 60,00,000 shares in Rama Steel Tubes on 18 July 2023, at an average price of Rs. 38.17.

The company had informed the exchanges that it has inked a strategic Memorandum of Understanding (MoU) with JSW Steel Group. RSTL entered into a strategic and notable tie-up with India's largest steel manufacturer, JSW Steel Limited, for the purposes of Procurement of Hot Rolled Coils (HRC) used in the manufacturing of RSTL's steel tubes and pipes, Distribution of HRCs produced by JSW Steel in the entire western region and Manufacturing of value-added product, the pre-galvanized pipes, in agreement with JSW Steel Coated Products Ltd

The MoU will enable RSTL to procure 1,00,000 tons of HRC from JSW Steel on a Pan-India basis to support its manufacturing of various steel tubes and pipes. The MoU will enable RSTL to have greater control over its procurement, and supply chain while yielding competitive raw material costs. The MoU also establishes RSTL as an official distributor of JSW Steel for the distribution of HRC in the entire western region. Further, RSTL has entered into an agreement with JSW Steel Coated Products Limited to produce 200,000 Tons per Annum of high-value, pre-galvanized pipes, under the style and brand name of "JSW Kalinga" for the western region.

Commenting on the tie-up with JSW Steel, the management team of RSTL said: "We are thrilled to announce the initiation of a new strategic tie up with India's largest steel manufacturers. This Memorandum of Understanding (MoU) brings forth a multitude of competitive advantages for us. Firstly, it provides us with access to top-tier raw materials of exceptional quality, all at competitive prices. Secondly, it empowers us to enhance our procurement process, ensuring prompt and efficient sourcing, thereby bolstering our supply chain management capabilities. Ultimately, this will lead to streamlined operations, improved overall efficiency and in turn better profitability.

Through this MoU, we will also harness the vast distribution network and brand strength of the JSW Steel Group. This collaboration positions us to make significant strides in capturing market share across various product ranges, including the lucrative high-value pre-galvanized segment in the forthcoming quarters.

We will be starting procurement and distribution of HRC and production of pre-galvanized pipes with immediate effect. The production of pre-galvanized pipes has the potential to contribute additional volumes of 1,00,000 tons on a per annum basis in the first year.
At RSTL, we are fully committed to establishing a long-term and dependable supplier-customer tie up, with a strong emphasis on building sustainable relationships. Our unwavering dedication to stakeholder satisfaction drives us to become a stakeholder-centric organization, acknowledging the importance of creating value and fostering trust among all parties involved."

RSTL is one of the Pioneer and Leading Manufacturers in the Steel Tube and Pipes industry established in 1974. RSTL has a proven track record of operational excellence, cost efficiency, sustainable practices, high quality Manufacturer in Steel Tubes and Pipes Industry. RSTL has 20% export rate, with a global presence in more than 16 Countries. It currently has an aggregate capacity of 2.94 Lac MTPA.

RSTL has a subsidiary in UAE and a stepdown subsidiary in Nigeria which has strengthened the company's presence in global markets. RSTL has 4 state-of-art manufacturing capabilities located at Sahibabad (U.P.), Khopoli (Maharashtra) and Anantpur (Andhra Pradesh). RSTL has recently acquired 51% stake in Ashoka Infrasteel (Partnership firm) and 50% stake in Hagar Mega Mart Private Limited. RSTL also have 25% stake in Peer Panchal Construction (JV) and has got strong distributor network spread across India.