Gensol Engineering hits 5% lower circuit again as ED raids premises

Gensol Engineering share price today: Shares of troubled Gensol Engineering hit another 5 per cent lower circuit on Tuesday after the Directorate of Enforcement raided its premises and seized documents and electronic devices.

 

The stock hit the 5 per cent lower circuit for the 23rd straight session on Tuesday to an intraday low of ₹81.36 per share. From its peak of ₹1,331 apiece in February last year, the stock has fallen by nearly 85 per cent. 

 

The stock has tumbled 90 per cent this year, compared to a 3.5 per cent advance in the benchmark Nifty 50. The market capitalisation of Gensol Engineering has plunged to ₹309.2 crore, from its peak of ₹4,131 crore last year, a 92 per cent fall.

 

When Gensol Engineering made its public market debut through a small and medium enterprises (SME) initial public offering (IPO) in September 2019, its promoters held a commanding 96 per cent stake, which has not come down to a negligible fraction. However, retail individual shareholders have increased their stake substantially in the company. 

 

ED conducts search operations

 

The financial crime-fighting agency raided the premises of Gensol and seized documents and electronic devices. The company said that the financial impact of the search and seizure operation at its Gurgaon and Ahmedabad offices by the Directorate of Enforcement could not be ascertained.

 

Meanwhile, Power Finance Corp (PFC) and Indian Renewable Energy Development Agency (IREDA) have filed complaints, alleging document fraud, with PFC also claiming non-repayment of some debt. 

 

Why is Gensol under the scanner?

 

Earlier this month, the Securities and Exchange Board of India (Sebi) barred Anmol Singh Jaggi and Puneet Singh Jaggi, promoters and directors of Gensol Engineering, from the securities market, allegedly for diversion of funds and fraudulent practices. 

 

Further, the market watchdog directed Gensol Engineering to put on hold the stock split announced by it. Sebi said that the funds were used for luxury real estate, complex fund routing, and alleged misuse of public company money as if it were a private purse.

 

Sebi started scrutinising the case after multiple complaints and subsequent downgrades of Gensol's credit ratings by CARE Rating and Icra due to delays in servicing debt obligations by BluSmart Mobility, a related party of Gensol. 

 

About Gensol Engineering

 

Gensol Engineering operates in the renewable energy sector, specialising in solar power engineering, procurement, and construction (EPC) services, as well as innovative electric mobility solutions.