In a startling turn of events, Gensol Engineering has witnessed a dramatic decline in its stock value over the past 40 days, leaving investors in shock. Once a market favorite, the company’s shares have plummeted from a soaring peak of Rs 1,124.90 to a dismal Rs 59.78, marking a staggering 94% drop from its 52-week high. This sharp downturn has raised significant concerns among shareholders, especially following a recent ruling from the Securities Appellate Tribunal (SAT) that offered no interim relief.

Gensol’s Stock Plummets: Key Developments

• 42% Decline: The stock hit its 20th consecutive lower circuit, reflecting the ongoing distress.
• SAT Ruling: The tribunal has mandated Gensol to submit a formal response within two weeks, while granting the Securities and Exchange Board of India (SEBI) four weeks to provide its final verdict.

What Triggered the Downward Spiral?

The downward trajectory of Gensol’s share price can be traced back to April, when SEBI accused the company, along with its promoters, of serious misconduct, including fund diversion and document forgery. These allegations sent shockwaves through the market, prompting an aggressive sell-off on Dalal Street.

• Market Restrictions: SEBI not only leveled accusations but also prohibited Gensol and its promoters from participating in the securities market, seriously hindering the company’s ability to raise funds or trade effectively.

Investigations and Fallout

The turmoil for Gensol does not end with SEBI’s accusations. Complaints have been lodged with the Economic Offences Wing, and financial institutions like IREDA and PFC have distanced themselves from repayment certificates that Gensol allegedly forged to conceal payment defaults.

• Corporate Investigation: The Ministry of Corporate Affairs has also initiated its own investigation into the matter. Notably, Gensol’s prominent figure, Anmol Singh Jaggi, has been barred from holding executive positions within any listed company.

The Controversial Rs 978 Crore Loan

At the heart of this ongoing crisis lies a significant Rs 978 crore loan intended for the acquisition of electric vehicles (EVs). Gensol had plans to lease 6,400 EVs to its affiliate, BluSmart Mobility. However, SEBI has raised flags, asserting that Gensol only procured 4,700 EVs and cannot account for Rs 262 crore after a year.

• Potential Misuse of Funds: SEBI suspects that some of the loan funds may have been misappropriated for luxury real estate and payments to companies associated with Gensol’s promoters.

The situation remains fluid as Gensol grapples with these challenges. Investors will be watching closely for any developments that might impact the company’s future in an increasingly uncertain market.