Gensol Engineering’s share price has been in a crisis since late-February month. The stock has not seen a clear day of bulls in 13 consecutive sessions so far, while hitting back-to-back lower circuits for eight sessions straight. In 13 sessions, Gensol crashed by 55% as of March 13. The company is grappling with a credit rating downgrade and restoring its image after ICRA accused Gensol of falsifying its debt servicing track record. On Thursday, Gensol announced a host of fundraising plans to turn zero-net-debt company.

Gensol Engineering Share Price:

After market hours of March 13, Gensol shares were locked at its 5% lower circuit to Rs 261.70 apiece. The stock has hit 5% lower circuit from March 7th to 13th, while this was reduced from its prior 10% lower circuit which it struck from March 4th to 6th.

From March 4th to 13th, there were a total 8 sessions and Gensol touched 8 lower circuits on repeat. However, Gensol has been in deep red zone since February 24th.

From February 24th to March 13th, there are 13 sessions and Gensol crashed during the entire period. The last bullish zone was seen on February 21 in Gensol, when its share price was at Rs 579.60 apiece. From February 21st to date, Gensol shares have nosedived by at least 54.84%.

Why Gensol Engineering Shares Are Falling?

It all started with rating agency ICRA who on March 4th, downgraded bank facilities of Gensol Engineering to [ICRA]D following feedback received by ICRA from the company’s lenders about the ongoing delays in debt servicing.

ICRA highlighted that Gensol in its latest public disclosures as well as in its recent communications with ICRA, had highlighted sizeable available liquidity to support its operations during its ongoing growth phase. In this regard, reference can be drawn to GEL’s investor call transcript dated February 13, 2025, wherein the management had highlighted total liquidity in the books of about Rs. 250 crores1, in addition to access to working capital limits. GEL had also been sharing no-default statements with ICRA at the beginning of every month suggesting timely debt servicing.

But ICRA added that it has now learnt that certain documents shared by GEL with ICRA, on its debt servicing track record, were apparently falsified, which raises concerns about its corporate governance practices, including its liquidity position.

ICRA’s rating came after the CARE rating review on Gensol on March 3. CARE downgraded the ratings assigned to the bank facilities of Gensol Engineering on account of ongoing delays in the servicing of term loan obligations as per feedback from its lenders. The rating action is in line with CARE’s policy on default recognition.

CARE observed that GEL’s liquidity remains poor as reflected by the ongoing delay in the debt servicing. CARE cited that as per feedback from GEL’s lender, there have been delays in debt servicing by GEL along with pending over dues and SMA classification of the account.

On March 4th alone, Gensol shares nosedived to hit 20% lower circuit, while the stock fell by 10% each on March 5th and 6th alone.

Gensol responded quickly on March 5th saying, “we understand the concerns these downgrades have raised and are committed to addressing them responsibly to all our stakeholders.”

The company denied any involvement in falsification claims and would be setting up a committee to comprehensively review the matter. It said, “This underscores company’s commitment to accountability, transparency and sustainable business practices.” Adding, it said, “These are challenging times, and we are taking decisive steps toward strengthening our financial position and ensuring long-term financial stability.”

Data from Gensol revealed that its current debt stood at Rs 1,146 crore, against its reserves of Rs 589 crore, which brought a debt-to-equity ratio of 1.95. In the current fiscal, Gensol revealed that it reduced its debt obligations by Rs 230 crore.

However, panic escalated further when Ankit Jain, Chief Financial Officer and Key Managerial Personnel resigned from his position in the company. Gensol appointed Jabirmahendi Mohammedraza Aga as the Chief Financial Officer and Key Managerial Personnel of the Company.

On March 13, Gensol announced fundraising plan of Rs 600 crore apart from its first ever stock split.

Gensol Engineering Rs 600 Crore Fundraising:

In a meeting held on March 13, the board of Gensol approved fundraising initiatives worth Rs 600 crore, which will be aimed at significantly enhancing its financial standing. Gensol said, “This move underscores the company’s strong commitment to achieving sustainable growth, reducing debt, and maximizing value for its stakeholders.”

Of the total, Gensol will raise about Rs 400 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs).

While Rs 200 crore will be raised through the issuance of warrants to promoters.

With Rs 600 crore fundraising plan, Gensol expects its reserve to rise to Rs 1,2000 crore. While Rs 615 crore of divestments are underway, which will reduce its debt to Rs 530 crore. These measures are expected to a significantly improved and healthy debt-equity ratio of 0.44 for Gensol.

Anmol Singh Jaggi, Managing Director at Gensol Engineering Limited said, “For years, we have delivered high value to our shareholders, and that remains our top priority. We are sharply focused on achieving a net-debt zero status, maintaining financial discipline, and unlocking even greater potential for our investors.”

Gensol Engineering Warrants:

The issuance of promoter warrants is happening at Rs 56 per share at Rs 1 face value, which is equivalent to Rs 560 per share of Rs 10 face value, considering the 10:1 stock split approved by the Board.

At Rs 56 per Rs 1 face value share, the pricing represents a 213% premium over the current market price of Rs 262 per share (Rs 10 face value adjusted). This underscores the promoters’ strong confidence in the company’s future growth and value creation potential, as per Gensol.

Gensol Engineering Stock Split:

The company’s board have considered, approved and recommended resolution through general meeting for alteration of the capital of the Company by subdivision/split of existing equity share of the Company from 1 (One) equity share having a face value of Rs. 10/- (Rupees Ten only) each, fully paid-up, into 10 (Ten) equity shares having face value of Rs. 1/- (Rupees One only) each, fully paid-up.

Hence, the stock split ratio will be 1:10 and for the first time by Gensol.

The record date for the purpose of the above sub-division/split of Equity Shares shall be decided after obtaining approval of the shareholders and will be intimated in due course.

Gensol Engineering Share Analysis:

As per Markets Mojo, Gensol is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a bearish trend. Over the past year, Gensol’s performance has been starkly contrasted with the BSE 500 index, which has seen a modest gain of 0.41%. The stock’s significant drop of 68.50% raises questions about its market position and investor confidence.

About Gensol Engineering:

Established in 2012, Gensol Engineering Limited is a pioneering force in the renewable energy sector, specializing in solar power engineering, procurement, and construction (EPC) services, along with cutting-edge electric mobility solutions.