Gensol Engineering shares decline 4% as promoters sell stake amid liquidity concerns

Gensol Engineering shares fell over 4 percent in intra-day trading on Monday after the company disclosed that its promoters had sold 2.37 percent of its total equity, amounting to 9 lakh shares. The promoters stated that the sale was aimed at “unlocking liquidity” for reinvestment into the business.

However, the stock has been on a persistent decline, marking its tenth consecutive session of losses, having plunged 47 percent over the past ten trading sessions following multiple credit rating downgrades.

“The promoters have sold approximately 2.37 percent 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,” Gensol Engineering stated in its filing.

The company clarified that the entire proceeds from the stake sale—or even more—would be reinvested during the warrant subscription round scheduled for June 18, 2024. After the transaction, promoter holding in Gensol Engineering now stands at 59.70 percent. The move, according to the company, is part of a broader strategy to reinforce the company’s balance sheet and ensure stability.

In a separate regulatory filing, the company announced that its board would meet on March 13 to discuss key strategic measures, including a potential stock split and various fundraising options. The board is expected to consider raising funds through equity issuance, foreign currency convertible bonds (FCCBs), or other financial instruments.

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.”

Credit Downgrades and Financial Struggles

The recent stock plunge follows multiple credit rating downgrades by CARE Ratings and ICRA due to concerns over short-term liquidity mismatches.

CARE Ratings (March 4, 2025): The agency downgraded Gensol Engineering’s long-term bank facilities worth ₹639.7 crore to “CARE D” from “CARE BB+” with a stable outlook, citing delays in debt servicing.

ICRA Ratings (March 5, 2025): ICRA downgraded the company’s bank facilities to “[ICRA]D” after receiving feedback from lenders regarding ongoing delays in debt repayments.

Gensol acknowledged these downgrades, stating that liquidity pressures were temporary and were being addressed through customer payments and planned asset divestments aimed at reducing debt.

Adding to investor concerns, Gensol Engineering recently announced a leadership change, with Chief Financial Officer (CFO) Ankit Jain stepping down and being succeeded by Jabirmahendi Mohammedraza Aga.

Stock Performance and Market Reaction

Gensol Engineering’s stock hit a low of ₹308 on Monday, marking a sharp decline of 73 percent from its all-time high of ₹1,125.75 in June 2024. The stock also touched a 52-week low of ₹303 on March 7, 2025.

Over the past year, the company’s share price has plummeted by 68 percent, with steep declines continuing into 2025. The stock has dropped over 42 percent in March alone, extending its losing streak for the fourth straight month. It declined 27 percent in February, 2.5 percent in January, and over 5 percent in December.

Founded in 2012, Gensol Engineering Limited is a key player in the renewable energy sector, specializing in solar power engineering, procurement, and construction (EPC) services. The company also operates in the electric mobility space, offering solutions for sustainable transportation.

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