What is the cause for the development of a pea-sized red tender lump on the skin?

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Please share few clear pictures of the lesion so that I can give a better opinion.

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I got the pictures (attachments removed to protect the patient's identity). I will be able to give a better opinion if the pictures are taken from the top of the lesion.

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We can consider two differential diagnoses here with the images and information provided. They are Epidermoid cyst or sebaceous gland cyst. It grows slowly due to sebum secretion in the cyst. It is a benign growth only. Lipoma - a soft, benign growth in fat cells underneath the skin. It moves easily in a parallel direction. Suppose possible, please forward a few pics from the top of the lesion to guide you in a better way. I hope this was helpful.

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I can see a punctum (opening of the cyst) in the attached picture (attachments removed to protect the patient's identity). It is an epidermoid cyst only. You can ignore it or can get it excised under local anesthesia if it is bothering you. I hope this was helpful.

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Check for the following signs. Number - if their number is increasing with more than 20 to 30 lesions, then plan for a biopsy. Colour - normal color is skin color with a black dot on the top. If the color changes drastically with a red hue, then plan for a biopsy. Symptoms - usually, the epidermoid cyst is symptomless. If you notice severe pain, then cross-check with your doctor for a physical examination. It is only a cosmetic concern. You can take a picture and compare it once in four to six months, or else plan for an excision biopsy whenever you find some time. I hope this was helpful.