On March 19, 2025, the shares of Gensol Engineering faced a staggering decline, marking the 16th consecutive day of losses. The stock plummeted to a new record low of ₹224.90, hitting the 5% lower circuit limit. This dramatic downturn has resulted in an overall decline of 61%, and since peaking at ₹1,125, the shares have dropped a jaw-dropping 80%, making them one of the largest wealth destroyers of the year.
Investor Wealth Eroded
The relentless fall in Gensol’s stock has erased approximately ₹1,200 crore in wealth for retail investors, who held a 35% stake in the company as of the previous quarter, according to BSE data. In stark contrast, the company’s market capitalization has plummeted to ₹853 crore, down from ₹4,275 crore at its 52-week high, translating to a staggering loss of ₹3,422 crore in just three weeks.
- Promoter Stake: 62.7% (with 81.70% pledged)
- Domestic Institutional Investors (DIIs): 1.4%
- Foreign Institutional Investors (FIIs): 0.6%
What Led to the Decline?
The sharp downturn in investor sentiment can be largely attributed to persistent delays in servicing the company’s term loan obligations, compounded by serious allegations regarding the falsification of debt servicing documents. These issues have prompted significant credit rating downgrades from both ICRA and CARE. Furthermore, the recent resignation of the Chief Financial Officer (CFO) has further shaken investor confidence.
To counter these financial troubles, Gensol Engineering has proposed several fundraising initiatives. On March 13, the board approved plans to raise ₹400 crore via Foreign Currency Convertible Bonds (FCCBs) and an additional ₹200 crore through the issuance of warrants to promoters. These measures are intended to stabilize the company’s financial standing.
Ongoing Divestments and Future Outlook
In conjunction with these fundraising efforts, Gensol is pursuing divestments, including the sale of 2,997 electric vehicles valued at ₹315 crore and a complete divestment of a subsidiary for ₹350 crore. However, despite these initiatives, analysts remain skeptical about the stock’s recovery potential.
In early March, ICRA Ratings downgraded Gensol Engineering’s bank facilities to [ICRA]D, while CARE Ratings downgraded its long-term bank facilities worth ₹639.7 crore from “CARE BB+” to “CARE D”. This reassessment reflects growing concerns about the company’s liquidity and operational stability.
About Gensol Engineering
Founded in 2012, Gensol Engineering serves as the flagship company of the Gensol Group, specializing in engineering, procurement, and construction (EPC) services within the solar power sector. The company made its debut on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in 2023, but recent events have cast a shadow over its future prospects.
As the situation unfolds, investors and market analysts will be closely watching Gensol Engineering’s next steps in an effort to regain stability and restore trust in the company’s financial health.
