Gensol Engineering Stock Drops 5% as ₹29 Crore Promoter Infusion Fails to Lift Sentiment

Shares of the struggling EPC firm, Gensol Engineering, continued to decline in morning trade on March 11, as investors offloaded their holdings.

At 10:15 am IST, Gensol Engineering share price hit its 5% lower circuit, trading at ₹290.55 on the NSE.

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Promoters' Infusion Fails to Halt the Decline

On the previous day, Gensol Engineering’s promoters announced an infusion of ₹29 crore into the company by converting warrants into equity. As per a stock exchange filing, these warrants were converted into 4,43,934 equity shares at ₹871 per share.

Despite this move, intended to boost investor confidence, the market response remained negative. The company's shares have been on a continuous downward trajectory, marking their 11th consecutive session of decline on March 11. This prolonged slump has resulted in a nearly 70% drop from the stock’s 52-week high, reinforcing investor concerns over the company’s financial health.

Promoter Stake Sale Raises More Concerns

Adding to investor anxiety, Gensol’s promoters recently offloaded a 2.3% stake in the company. In total, approximately 9 lakh equity shares, accounting for 2.37% of the company’s total equity, were sold.

The decision to sell shares, despite the earlier capital infusion, has raised questions about the promoters' confidence in the company’s long-term growth. While the reason behind the stake sale remains unclear, investors are interpreting it as a potential red flag.

Financial Woes and Rating Downgrades

Gensol’s stock has plummeted to a multi-month low due to financial struggles and a series of credit rating downgrades. The company has faced ongoing delays in servicing its term loan obligations, triggering concerns over its liquidity position.

Credit rating agency ICRA recently downgraded Gensol Engineering after receiving negative feedback from the company’s lenders regarding delays in debt servicing. ICRA also accused the clean energy company of falsifying debt servicing documents, further worsening investor sentiment.

While Gensol has strongly denied these allegations, the controversy has weighed heavily on the stock. The company has launched an internal investigation to address the claims and reassure stakeholders.

Market Sentiment and Future Outlook

Market experts believe that unless Gensol provides more transparency regarding its financials and successfully addresses the allegations, the stock could continue to face selling pressure. Investor confidence has been shaken by the combination of stake sales, debt servicing issues, and allegations of financial misrepresentation.

The company’s ability to regain market trust will depend on its ability to stabilize operations, secure fresh funding, and clarify its financial position. Until then, Gensol’s stock is likely to remain under pressure, with investors exercising caution before making fresh entries.