Gensol Engg share price tanks 35% in 3 days on downgrades by CARE, ICRA

ICRA has learnt that certain documents shared by Gensol Engineering with the rating agency, on its debt servicing track record, were apparently falsified

Gensol Engineering share price was locked in the lower circuit for the third straight day, down 10 per cent at Rs 393 on the BSE, in Thursday's intraday trade after credit rating agencies , CARE Ratings and ICRA, downgraded the company's credit ratings. The action follows feedback received by the rating agencies from the company's lenders about the ongoing delays in debt servicing.

 

In the past three trading days, the smallcap company's stock has tanked 35 per cent. In the past one week, it has plunged 40 per cent. In comparison, the BSE Sensex was down 1 per cent during the week.

 

 

Gensol Engineering share hit a fresh 52-week low today, having tanked 70 per cent from its 52-week high level of Rs 1,125.75, which it touched on June 24, 2024.

 

Till 09:54 AM, a combined 82,000 equity shares had changed hands and there are pending sell orders for nearly 1 million shares on the NSE and BSE.

 

Gensol Engineering, in an exchange filing, said 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.

 

CARE Ratings has downgraded the company's ratings on long-term and short-term loan facilities due to the on-going delays in the servicing of term-loan obligations.  READ: Power stocks: Buy in Summer, Sell in Winter; chart hints up to 27% upside

 

"As per the feedback from Gensol's lender, there have been delays in debt servicing by Gensol Engineering, along with pending over dues and SMA classification of the account. The liquidity situation at the company remains poor," it said in a statement.

 

ICRA, meanwhile, said the ratings for the bank facilities of Gensol Engineering have been downgraded to [ICRA]D following the feedback received by the rating agency from the company's lenders.

 

While the company has delayed in its debt servicing obligations as per feedback received from the lenders, it had, in its latest public disclosures as well as in its recent communications with ICRA, highlighted sizable available liquidity to support its operations during its ongoing growth phase.

 

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

 

Meanwhile, Gensol management said that the company continues to maintain strong revenue visibility supported by a healthy order book across key business segments. The company has also undertaken multiple initiatives aimed at strengthening its balance sheet, including focused efforts towards debt reduction and optimising working capital. The management remains confident in the long-term growth potential of the business and is committed to creating sustainable value for all its stakeholders.

 

Further, Gensol Engineering said these are challenging times, and the company is taking decisive steps toward strengthening its financial position and ensuring long-term financial stability. While the company continues to pay its debt obligations, all proceeds from the strategic deleveraging initiatives will be directly utilised toward repaying the company's existing debt and working capital obligations.  READ: Castrol India hits 5-month high on heavy volumes; up 50% from January low

 

"Through these periodic interventions and upcoming planned initiatives, we are resolute in our goal of achieving a zero net-debt status," Gensol said.

 

Gensol is a leading player in the renewable energy sector, specialising in solar power engineering, procurement, and construction (EPC) services, along with electric mobility solutions. Venturing beyond solar, Gensol has established a state-of-the-art electric vehicle (EV) manufacturing facility in Chakan, Pune (India), with a production capacity of 30,000 vehicles per annum.

 

Gensol not only manufactures but also provides comprehensive EV leasing solutions, catering to a diverse clientele that includes PSUs, educational institutions, government entities, multinational corporations, ride-hailing services, employee transport companies, rental services, logistics, and last-mile delivery enterprises.