On Wednesday, April 16, Gensol Engineering faced a significant setback in the stock market, as shares plunged by 5% during morning trading. This decline follows the intervention of the Securities and Exchange Board of India (SEBI), which has taken decisive action against the company’s promoters due to allegations of fund diversion and governance misconduct. The regulator has temporarily halted Gensol’s proposed 1:10 stock split, raising concerns among investors and analysts alike.
SEBI’s Intervention
In a critical announcement on Tuesday, SEBI made it clear that it is prohibiting Gensol Engineering, along with its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from engaging in any trading activities within the securities market. This restriction remains in place until further notice. Additionally, both promoters have been barred from holding any directorial or significant management roles within the company.
- Key Points of SEBI’s Order:
- Gensol’s proposed stock split has been put on hold.
- Promoters are prevented from trading or managing the company.
- A forensic audit will be conducted to scrutinize the company’s financials.
Gensol Engineering’s Stock Split Plans
Recently, Gensol Engineering had announced an ambitious 1:10 stock split, aimed at attracting more retail investors. However, SEBI’s order emphasized that allowing this corporate action at this juncture might not serve the best interests of investors. The regulatory body will appoint a forensic auditor to delve into the company’s financial records, with a report expected within six months.
Current Share Price Movement
Gensol Engineering’s share price has seen a notable decline, closing at ₹130.15 the previous day, but opening significantly lower at ₹123.65 on the Bombay Stock Exchange (BSE) after the news broke. Similarly, on the National Stock Exchange (NSE), shares traded at ₹122.68, reflecting a 5% drop.
- Recent Share Price Trends:
- February: Shares were around ₹740.
- Current: Shares have dropped to approximately ₹130.
- Recent trading shows a continuous decline, with multiple ratings downgrades.
The sharp decline in Gensol Engineering’s share price highlights the current instability and uncertainty surrounding the company. Investors are advised to stay informed about further developments as SEBI continues its investigation into potential governance violations.
