Gensol Engineering shares plunge 50% in 12 days; rating downgrades weigh

Gensol Engineering share: The board of directors of the company will meet on Thursday, March 13, 2025, to consider and approve fund raising plan and stock split

Gensol Engineering (Gensol) share price was locked in the lower circuit for the third straight day, down 5 per cent at Rs 275.45 per share, on the BSE in Wednesday's intraday trade with only sellers seen on the counter. The stock price of the smallcap company was quoting lower for the 12th straight trading day, having fallen 50 per cent during the period. It is trading at its multi-year low price on the BSE.

 

Till 01:46 PM, around 74,000 shares had, collectively, changed hands on the NSE and BSE, and there are pending sell orders for 470,000 shares on the exchanges.

 

Established in 2012, Gensol Engineering operates in the renewable energy sector, specialising in solar power engineering, procurement, and construction (EPC) services, along with cutting-edge electric mobility solutions.

 

The downfall in the stock price of Gensol continues despite the company's promoters proposing to infuse approximately Rs 29 crore through the conversion of warrants into equity. The warrants will be converted into 443,934 equity shares at a price of Rs 871 per share.  ALSO READ: IndusInd Bank shares fall on derivative discrepancy; Crisis explained here

 

That apart, the board of directors of the company is scheduled to meet on Thursday, March 13, 2025, to consider and approve the proposal of raising of funds by way of issuance of equity shares or any other eligible securities through permissible modes, including qualified institutional placement (QIP), preferential issue or any other methods.

 

The board will also consider the proposal for alteration in the share capital of the company by way of sub-division/ split of the existing equity shares of the face value Rs 10 each.

 

The current decline in the market price of Gensol Engineering shares has been triggered after credit rating agencies, CARE Ratings and ICRA, last week, downgraded the company's credit ratings. The action came on the back of the feedbacks received by these rating agencies from the company's lenders about the ongoing delays in debt servicing.

 

Contrary to the company's delay in debt servicing obligations to the lenders, Gensol Engineering had made public disclosures as well as communicated to ICRA that it had sizable liquidity available to support its operations during its ongoing growth phase.

 

The agency has, now, learnt that certain documents shared by Gensol Engineering with ICRA, on its debt servicing track record, were apparently falsified, which has raised concerns on its corporate governance practices, including its liquidity position. CLICK HERE FOR DETAILS

 

Gensol, in an exchange filing, has said that the rating downgrades happened due to short-term liquidity mismatch, which is improving by way of customer payments. "That said, we understand the concerns these downgrades have raised and we are committed to addressing them responsibly to all our stakeholders," the company said. 

 

In a separate development, the promoter of Gensol Engineering, on Friday, March 7, sold 900,000 shares or 2.37 per cent of the total equity shares via open market. The company said the shares were sold to unlock liquidity that would be reinvested into the business via equity infusion.

 

A leader in renewable energy and electric mobility solutions, the company said its promoters have undertaken a purposeful initiative to further fortify the company's financial foundation and ensure sustained growth. The company said this step is a part of a strategy aimed at reinforcing its balance sheet and supporting stability.

 

The stock price of Gensol Engineering has corrected 65 per cent from its previous month high of Rs 776.20, touched on February 1, 2025.

 

On February 25, 2025, Gensol Engineering informed the stock exchanges that the company has signed a non-binding Term Sheet for a Rs 350-crore strategic transaction involving the sale of its US subsidiary, Scorpius Trackers Inc., to a major Renewable Energy Solutions provider in the US. The deal includes the transfer of exclusive and global Intellectual Property (IP) rights (except India) for Scorpius Trackers' advanced solar tracking technology.

 

The company had said the proceeds from this transaction will be strategically redeployed to expand Scorpius Trackers’ operations in India, fuel solar EPC business growth, and support Gensol's broader clean energy initiatives. This reinvestment aligns with the company's long-term vision to enhance cash flow and strengthen the balance sheet, ensuring sustained value creation for shareholders.

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