Gensol Engineering Ltd (GEL) has witnessed a sharp decline of nearly 28 per cent in its shares over the past two days following the downgrade of its loan facilities by credit rating agencies CareEdge and ICRA. CareEdge has downgraded Gensol to ‘default’ from ‘BB+’ due to ongoing delays in servicing its term loan obligations. On the other hand, ICRA has downgraded Gensol’s rating to ICRA D for its total rated amount of ₹2,050 crore, which includes long-term loans, cash credit, and bank guarantees.
As a result, the stock hit the lower circuit for the second consecutive day, closing at ₹372.60 on the BSE. The downward trend was further exacerbated by promoter Anmol Singh Jaggi’s sale of 2.15 lakh shares in the open market on February 18. Additionally, the promoters have been pledging their holdings with financial institutions, which has raised concerns about the company’s liquidity position.
Gensol operates in the renewable energy sector, providing engineering, procurement, and construction (EPC) services for solar projects. However, recent revelations have cast a shadow on the company’s credibility. ICRA reported that certain documents shared by GEL with them regarding its debt servicing track record were allegedly falsified. This has raised concerns about the company’s corporate governance practices and liquidity management.
In response to the downgrades, GEL stated that the downgrade was due to a short-term liquidity mismatch, which is improving with incoming customer payments. The company denied any involvement in falsification claims and announced plans to set up a committee to thoroughly review the matter. It reaffirmed its commitment to accountability, transparency, and sustainable business practices.
Despite the recent setbacks, Gensol Engineering has reported strong growth in key financial parameters. The stock, which was first listed on the BSE-SME in 2019 before migrating to the BSE main platform and NSE in 2023, had been a favorite among market participants. However, the recent developments have led to a significant decline in its share price, reflecting the challenges the company is currently facing in the market.
