Shares of Gensol Engineering Ltd (GEL) plunged almost 28 per cent within the final two days after credit standing companies CareEdge and ICRA downgraded its mortgage amenities. The previous has downgraded Gensol to ’default’ from ‘BB+’ resulting from ongoing delays in servicing its time period mortgage obligations.
ICRA has downgraded Gensol’s ranking to ICRA D for its complete rated quantity of ₹2,050 crore, which incorporates long-term loans (₹925 crore), money credit score (₹718.5 crore), and financial institution ensures (₹406.5 crore) from ICRA BBB- (secure)/ICRA A3 ranking.
For the second consecutive day, the inventory hit the decrease circuit (20 per cent on Tuesday and 10 per cent on Wednesday) to shut at ₹372.60 on the BSE.
On February 18, its promoter Anmol Singh Jaggi bought 2.15 lakh shares within the open market. In addition to, its promoters have additionally been continuously pledging their holdings with monetary establishments.
Gensol operates within the renewable power sector, offering engineering, procurement and building (EPC) providers for photo voltaic tasks
ICRA has reported that sure paperwork shared by GEL with ICRA concerning its debt servicing observe report have been apparently falsified. This raised considerations about its company governance practices, together with its liquidity place. Additional, delays in debt servicing by greater than 15 days to Blusmart’s bondholders in February 2025 factors to lapses in liquidity administration inside the group.
The monetary flexibility of the promoters has been considerably impacted, owing to extend in share pledge to 85.5 per cent in February 2025 from 79.8 per cent in September 2024, amid steady decline in share value of GEL over the previous few months. Moreover, there’s a delay in fairness increase and infusion plans in opposition to earlier expectations, it added.
CARE Rankings on Monday revised the rankings assigned to the banking amenities of GEL on account of on-going delays within the servicing of time period mortgage obligations per suggestions from its lenders. The ranking motion is in keeping with CARE’s coverage on default recognition.
GEL’s response
Acknowledging the latest downgrades by CARE and ICRA, the corporate mentioned: “the downgrade occurred resulting from short-term liquidity mismatch which is bettering by the use of buyer funds. That mentioned, we perceive the considerations these downgrades have raised and are dedicated to addressing them responsibly to all our stakeholders.”
The corporate has denied any involvement in falsification claims and mentioned they’ll be establishing a committee to comprehensively evaluation the matter. “This underscores firm’s dedication to accountability, transparency and sustainable enterprise practices,” it added.
“We wish to reinforce that the corporate has reported robust progress in key monetary parameters throughout the board,” it additional mentioned.
SME to mainboard
The inventory of Gensol Engineering was first listed on the BSE-SME on October 15, 2019, after the corporate raised ₹17.93 crore at ₹83 a share within the IPO. The inventory migrated to the BSE fundamental platform and listed on the NSE on July 3, 2023.
The inventory has been a darling of market contributors since its itemizing, because it jumped from a mere ₹83 to hit an all-time excessive of ₹1,217.25 (adjusted for 2 bonuses 3:1 in 2021 and a couple of:1 in 2023).
