Shares of Gensol Engineering lost 54.85% in thirteen consecutive trading sessions from its recent closing high of Rs 579.60 on 21 February 2025.
The counter came into the limelight after the rating agency downgraded the company's long-term bank facilities of Rs 639.70 crore from CARE BB+ (Stable) to CARE D and its long-term/short-term bank facilities of Rs 76.30 crore from CARE BB+ (Stable) / CARE A4+ to CARE D / CARE D. This downgrade reflects a significant increase in the perceived risk of default on the company's debt obligations.
The stock hit a 52-week low of Rs 261.70 today. The stock hit a 52-week high of Rs 1,125.75 on 26 June 2024. The counter lost 76.75% from its 52-week high of Rs 1,125.75 on 26 June 2024.
On the technical front, the stock's daily RSI (relative strength index) stood at 12.859. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.
On the daily chart, the stock was trading below its 50-day and 100-day simple moving average (SMA) placed at 622.65, 705.42, and 823.53, respectively. These levels will act as crucial resistance zones in the near term.
The board of Gensol Engineering on 13 March 2025 approved splitting one share of Rs 10 each into 10 shares with a face value of Rs 1 each. Record date for the stock split will be intimated in due course after obtaining shareholder approval.
The board also approved fund-raising initiatives amounting to Rs. 600 crore aimed at significantly enhancing its financial standing. The company plans to raise Rs 400 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs); and Rs 200 crore through the issuance of warrants to promoters. The warrants will be issued at Rs 56 apiece, after adjustment of sub-division of equity shares.
This initiative, combined with the company’s ongoing divestments, including the sale of vehicles and the sale of a subsidiary, is expected to significantly improve Gensol’s debt-equity ratio, positioning it for long-term financial strength and resilience.
Currently, Gensol Engineering has a debt of Rs. 1,146 crore against reserves of Rs 589 crore, resulting in a debt-equity ratio of 1.95. With this announcement of Rs 600 crore fund-raise, the company’s reserves are expected to increase to approximately Rs. 1,200 crore. Additionally, with Rs 615 crore of divestments underway, the company’s debt will be reduced to approximately Rs. 530 crore. These measures will lead to a significantly improved and healthy debt-equity ratio of 0.44.
Founded in 2012, Gensol Engineering has over a decade of experience in the renewable energy sector. Its diverse business interests include EPC and O&M services for solar power projects, EV leasing through its partnership with Blu-Smart, and the upcoming EV manufacturing division, with a plant currently under construction in Pune.
The company's consolidated net profit rose 32.52% to Rs 16.91 crore on a 56.42% increase in revenue to Rs 344.51 crore in Q3 FY25 over Q3 FY24.
