Rhetan TMT plans bigger expansion with ₹300 crore borrowing limit

Rhetan TMT is looking to create more room for its business expansion, with the company seeking approval to increase its borrowing limit from ₹200 crore to ₹300 crore. The higher limit would give the steelmaker additional financial flexibility to fund its planned growth and future requirements. 

The move comes alongside two recent developments aimed at strengthening the company’s manufacturing business. Rhetan TMT has started generating power from a 1 MW captive solar project at its Kadi, Gujarat manufacturing facility. 

Since energy accounts for nearly 20% of the company’s overall cost base, generating its own renewable power could help lower energy costs over time. Commenting on the developments, Rhetan TMT Managing Director Shalin Shah said the solar project would give the company “greater control over a key operating input” while supporting its sustainability goals.

Together, the solar project and premium steel products are aimed at improving the company’s production costs and expanding the markets it can serve.

The proposed increase in borrowing capacity does not mean Rhetan TMT will immediately borrow the additional ₹100 crore. It would provide the company with the ability to raise funds as required for expansion and other business needs.

Rhetan TMT has reported profit growth at a 140% compound annual growth rate over the past five years, according to the company. 

For investors, the key factor to watch will be how Rhetan TMT uses the additional borrowing capacity and whether its investments in manufacturing, energy savings and higher-grade steel translate into stronger revenue and profits.