Gensol Engineering shares fall 4%: Promoters sell 2.37% stake, company to consider stock split, fundraising on March 13; check details

The stock, which has been reeling under pressure after credit rating downgrades by CARE and ICRA, announced on Friday, March 7, that the company's promoters have sold approximately 2.37% of total equity shares of the company, amounting to 9,00,000 shares, to unlock liquidity that will be reinvested into the business through equity infusion.

This step is part of a strategy aimed at reinforcing the company’s balance sheet and supporting stability, it said.

Further underscoring their commitment, the promoters will infuse the same amount received through this sale or more amount in the warrant subscription round executed on June 18, 2024, thereby providing additional growth capital to the company.

Following this transaction, the promoters continue to hold a substantial 59.70% stake, reflecting their steadfast dedication to Gensol’s journey of delivering value to all stakeholders while driving forward the clean energy transition, the company said.

Besides, in a separate announcement, the company said that its board will meet on Thursday, March 13, to:

• To consider and approve the proposal of raising funds by way of issuance of equity shares or any other eligible securities (“Securities”) through permissible modes, subject to such regulatory/statutory approvals as may be required and the approval of shareholders of the company.

• To 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 ₹10, fully paid-up, in such manner as may be determined by the Board of Directors subject to the approval of the shareholders of the company and any regulatory/ statutory approvals, as may be required under applicable law.

• To convey extraordinary general meeting to approve fundraising, sub-division/ split of shares, or any other matter of the company.

On March 6, the company said the re-appointment of Jabirmahendi Aga as its new Chief Financial Officer (CFO), effective immediately. He succeeds Ankit Jain, who has decided to pursue other opportunities.

Established in 2012, Gensol Engineering Limited, is a leading player in the renewable energy sector specialising in solar power engineering, procurement, and construction (EPC) services, along with electric mobility solutions.

Recent crisis

Shares of the company have fallen 40% in a week. The stock has taken a heavy beating after rating agencies CARE and ICRA recently downgraded the company's credit ratings.

Addressing the downgrades, Gensol Engineering Ltd. (GEL) last week said proceeds from the series of asset divestments will be used to reduce debt.

Acknowledging the credit rating downgrades by CARE and ICRA, the firm said that it has happened due to a short-term liquidity mismatch, which is improving by way of customer payments.

On March 4, CARE Ratings downgraded the company to default from the previous “BB+.”

Further, it downgraded Gensol’s long-term bank facilities worth ₹639.7 crore to “CARE D” from the previous “CARE BB+” with a stable outlook. Furthermore, it also revised its ratings lower for other long-term/short-term bank facilities from “CARE BB+” with a stable “CARE A4+” outlook to “CARE D.”

On March 5, ICRA Ratings downgraded the bank facilities of Gensol Engineering Limited (GEL) to [ICRA]D following feedback received by ICRA from the company’s lenders about the ongoing delays in debt servicing.

ICRA notes that Gensol Engineering has delayed its debt servicing obligations as per feedback received from the lenders.

"GEL, 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. GEL had also been sharing no-default statements with ICRA at the beginning of every month, suggesting timely debt servicing. However, ICRA 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 said.