Rhetan TMT has proposed increasing its borrowing limit to Rs 300 crore from Rs 200 crore, as the Ahmedabad-based steel manufacturer looks to create additional financial headroom for its future funding requirements and expansion plans.
The proposal will be placed before shareholders as a Special Resolution at the company’s upcoming Annual General Meeting (AGM). The proposed limit will exclude temporary bank loans raised in the ordinary course of business.
Stock Hits Upper Circuit
Shares of Rhetan TMT rose 10% to hit the upper circuit at Rs 21.05 apiece on the BSE on Wednesday, September 2.
The proposed increase in borrowing capacity comes as the company has reported a significant improvement in profitability in recent years. Rhetan TMT said its profit has grown at a compound annual growth rate (CAGR) of 140% over the past five years.
Solar Power Generation
Separately, Rhetan TMT has commenced power generation from a 1 MW captive, ground-mounted solar power project at its manufacturing facility in Kadi, Gujarat.
The solar plant is operational and is supplying renewable power for captive consumption. Energy expenses account for nearly 20% of the company’s overall cost base, making power costs a significant component of its manufacturing economics.
The company expects the captive solar project to reduce its reliance on conventional power sources and improve cost efficiency over the long term.
“The commissioning of our 1 MW captive solar power project is an important step in strengthening the energy economics of our manufacturing operations. With energy representing a meaningful component of our cost base, the project gives us greater control over a key operating input while also supporting our sustainability objectives,” Shalin Shah, Managing Director, Rhetan TMT Ltd, said.
The company has also received Bureau of Indian Standards (BIS) certification for its Fe500D, Fe550 and Fe550D TMT bar grades.