Gensol Engineering Hits Lower Circuit for 6th Straight Session, Extends 15-Day Loss Streak

Stock Plunges Amid Financial Woes, Ratings Downgrade, and Alleged Data Falsification

March 18, 2025 – Mumbai: Shares of Gensol Engineering Ltd continued their downward spiral, hitting a 5% lower circuit at ₹236.7 per share on the NSE for the sixth straight session. The stock has now declined for 15 consecutive trading days, wiping out over 80% of its market value in recent months.

According to BSE analytics data, Gensol Engineering’s share price has plunged 42.93% in the past two weeks and 56.37% over the last 30 days, marking one of the steepest declines among listed engineering, procurement, and construction (EPC) firms.

Key Reasons Behind Gensol Engineering’s Stock Crash

1. Delayed Loan Payments and Liquidity Issues
   Gensol Engineering is facing delays in servicing its term loan obligations, raising concerns about its financial health. Reports indicate that ongoing debt repayment issues have contributed to multiple credit rating downgrades, making it harder for the company to raise funds at favorable terms.

2. Allegations of Financial Irregularities
   Market sentiment further deteriorated after allegations surfaced regarding the falsification of financial data. While Gensol Engineering has denied any involvement in fraudulent activities and initiated an internal probe, investor confidence remains shaken.

3. Multiple Ratings Downgrades
   Credit rating agencies have downgraded Gensol Engineering’s financial outlook, citing concerns over its debt-servicing ability and cash flow constraints. These downgrades have led institutional investors and fund managers to reduce exposure to the stock, further accelerating the sell-off.

4. Fundraising Plans Amid Stock Rout
   In an attempt to restore investor confidence and strengthen its balance sheet, the company’s board has approved two fundraising initiatives totaling ₹600 crore:

   • ₹400 crore via Foreign Currency Convertible Bonds (FCCBs)
   • ₹200 crore through the issuance of warrants to promoters

   However, given the ongoing liquidity crisis and plummeting stock price, the success of these fundraising efforts remains uncertain.

Gensol Engineering’s Market Performance: A Deep Dive

• 6-Day Lower Circuit: Gensol Engineering’s stock has hit the lower circuit for six consecutive sessions, indicating persistent selling pressure.
• 42.93% Drop in Two Weeks: The stock has lost nearly half of its value in just 14 trading days.
• 56.37% Decline in One Month: A downward trajectory that has wiped out significant investor wealth.
• 80% Crash From All-Time High: The stock has fallen over 80% from its peak levels, raising concerns over its long-term sustainability.

Investor Sentiment and Market Outlook

Investor sentiment toward Gensol Engineering remains deeply negative. With financial instability, allegations of data falsification, and a sharp decline in stock price, institutional investors have largely exited the stock.

Despite announcing a ₹600 crore capital raise, analysts remain skeptical about the company’s ability to execute fundraising at fair valuations amid the stock’s steep decline and liquidity constraints.

Moreover, Gensol’s ongoing internal probe into alleged financial discrepancies has added another layer of uncertainty. Market participants are awaiting further clarity from regulators and auditors before considering fresh investments in the stock.

Developments to Watch

• Outcome of Internal Investigations: Any confirmation of financial misreporting could result in further regulatory scrutiny and legal actions.
• Execution of ₹600 Crore Fundraising: If Gensol Engineering fails to secure fresh capital, it may struggle with debt obligations and operational liquidity.
• Credit Rating Actions: Further rating downgrades could push lenders to tighten credit lines, worsening the company’s financial distress.
• Stock Movement and Trading Volume: If the lower circuit trend continues, the stock could face longer periods of illiquidity, limiting its ability to recover.

With Gensol Engineering’s stock continuing to slide amid financial uncertainty, investors are closely monitoring the company’s next moves to assess whether a turnaround is possible or if further downside is imminent.