This smallcap penny stock soared 18% on renewable energy foray; details here

Shares of Rama Steel Tubes Ltd witnessed a sharp upward move on Tuesday after the smallcap firm announced a strategic investment in the renewable energy space. The penny stock zoomed 18.46 per cent to hit an intraday high of Rs 13.86. Last checked, it was up 13.08 per cent at Rs 13.23.

The tube and pipe manufacturer is set to participate as a joint venture (JV) partner in a 225 MW solar power project. This project is part of the government's PM-KUSUM scheme, aiming to enhance the use of solar power in the country.

The solar power initiative is structured under a special purpose vehicle (SPV) named Onix IPP. It is spread across multiple sites in Maharashtra, reflecting RSTL's commitment to diversifying into renewable energy sectors.

The company said power purchase agreements (PPAs) have been finalised with the Maharashtra State Electricity Distribution Company Limited (MSEDCL). This agreement sets a fixed tariff of Rs 3.10 per unit, ensuring price stability for a 25-year duration.

This move into the renewable energy space signals RSTL's commitment to sustainable practices and aligns with broader government initiatives to promote clean energy.

The scrip traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). Its 14-day relative strength index (RSI) came at 77.42. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-earnings (P/E) ratio of 119.91 against a price-to-book (P/B) value of 6.76. Earnings per share (EPS) stood at 0.11 with a return on equity (RoE) of 5.57. According to Trendlyne data, Rama Steel has a one-year beta of 0.8, indicating low volatility.

As of March 2025, promoters held a 47.96 per cent stake in the company.