Shares of Gensol Engineering Ltd. continued their downward spiral on Monday, falling by as much as 4.38% to ₹308 on the NSE. This decline follows a tumultuous week where the stock has plunged over 40%, exacerbated by recent credit rating downgrades from CARE and ICRA. Adding to the pressure, company promoters have offloaded 2.37% of their equity stake, a move they say is aimed at unlocking liquidity for reinvestment into the company.
Promoters Sell 9 Lakh Shares Amid Liquidity Crunch
Gensol Engineering’s promoters sold 9,00,000 shares last week, reducing their stake to 59.70%. The company explained that the move was designed to bolster liquidity and inject fresh capital into the business.
- The funds from the stake sale will be reinvested through an equity infusion.
- Promoters have pledged to infuse at least an equal amount in a warrant subscription round scheduled for June 18, 2024.
- The company claims this will strengthen its balance sheet and support stability amid financial headwinds.
Despite this assurance, investor confidence appears shaken, given the stock’s dramatic downturn over the past five trading sessions. The market capitalization of Gensol Engineering now stands at ₹1,241.73 crore.
Board Meeting on March 13: Fundraising and Stock Split in Focus
The company’s board of directors is set to convene on March 13, where key financial decisions will be taken. The agenda includes:
- Fundraising: The board will discuss raising capital via equity shares or other securities through permissible channels, subject to regulatory and shareholder approvals.
- Stock Split: A proposal to alter the company’s share capital structure by splitting the existing ₹10 face value equity shares will be considered. The details, including the split ratio, will be determined by the board.
- Extraordinary General Meeting (EGM): The board will schedule an EGM to seek shareholder approval for these measures.
A stock split could potentially improve liquidity and make shares more accessible to retail investors. However, given the current volatility, market watchers will be closely monitoring the board’s decisions.
Leadership Change: New CFO Takes Over
In another significant development, the company recently announced the re-appointment of Jabirmahendi Aga as Chief Financial Officer (CFO). Aga succeeds Ankit Jain, who stepped down to explore other opportunities.
The leadership reshuffle comes at a critical juncture for Gensol Engineering, as the company navigates financial turbulence and investor concerns over its ability to stabilize operations.
Credit Rating Downgrades Add to Market Jitters
One of the biggest blows to the stock has been the recent credit rating downgrades by CARE and ICRA. The company has acknowledged the impact of these downgrades, attributing them to short-term liquidity constraints.
To counter these setbacks, Gensol Engineering has outlined a strategy that includes:
- Asset divestments to reduce debt and strengthen financials.
- Equity infusion from promoters to boost liquidity.
- Exploring additional fundraising options to support growth initiatives.
Market analysts remain cautious, as the company’s immediate challenge will be restoring investor confidence while executing its financial recovery plan.
Gensol Engineering: A Key Player in Renewable Energy
Established in 2012, Gensol Engineering Ltd. is a prominent player in the renewable energy sector, specializing in solar power engineering, procurement, and construction (EPC) services. The company has also expanded into electric mobility solutions, positioning itself as a significant contributor to India’s clean energy transition.
Despite its strong market presence, the ongoing financial challenges highlight the risks associated with rapid expansion and external economic pressures. The outcome of the March 13 board meeting will be crucial in determining whether Gensol Engineering can regain its footing or if further turbulence lies ahead.