Gensol Engineering Share Price Decline: Key Insights

Market Performance

Gensol Engineering's share price has been continuously declining, marking its 16th consecutive session in the red on March 19, 2025. The stock was locked in a 5% lower circuit, reaching an all-time low of ₹224.90 per share. This marks a significant drop of 80% from its peak of ₹1,125 per share, leading to a substantial decrease in its market valuation.

Over the last three weeks, the company's market capitalization has decreased from ₹4,275 crore to ₹853 crore, reflecting a total loss of ₹3,422 crore. As per the latest shareholding data, retail investors held a 35% stake in the company, while promoters maintained a 62.7% stake, with 81.70% pledged. Institutional investors, including Domestic Institutional Investors (DIIs) and Foreign Institutional Investors (FIIs), held 1.4% and 0.6% stakes, respectively.

Factors Contributing to the Decline

The sharp downturn in Gensol Engineering's share price has been attributed to multiple financial and operational challenges. The company has experienced delays in servicing its term loan obligations. Additionally, there have been concerns about the accuracy of the debt servicing documents, leading to credit rating downgrades.

In March 2025, rating agencies ICRA and CARE revised their ratings for Gensol Engineering's bank facilities. ICRA downgraded the company's credit rating to [ICRA]D, while CARE Ratings lowered its long-term bank facilities rating to "CARE D" from "CARE BB+." This downgrade affected bank facilities worth ₹639.7 crore and other short-term and long-term financial instruments.

Company Measures and Financial Overview

In response to the financial strain, Gensol Engineering has announced measures to stabilise its financial position. On March 13, the company's board approved fundraising initiatives, including:

• Raising ₹400 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs)
• Issuing warrants worth ₹200 crore to promoters
• Divestment of assets, including selling 2,997 electric vehicles valued at ₹315 crore
• Selling a wholly owned subsidiary for ₹350 crore

Company Overview

Gensol Engineering Limited, founded in 2012, is a part of the Gensol Group. The company focuses on providing engineering, procurement, and construction services in the solar power sector. Gensol Engineering was listed on the National Stock Exchange and the Bombay Stock Exchange in 2023.

Summary

Gensol Engineering's share price has steeply declined over multiple trading sessions, leading to a significant drop in market capitalization. Contributing factors include credit rating downgrades, debt servicing concerns, and the resignation of key personnel. The company has announced fundraising and divestment plans to address liquidity challenges. As financial uncertainties persist, market participants continue to monitor the company's next steps.