Gensol Engineering Ltd.: Following CARE Ratings‘ downgrading of Gensol Engineering Ltd.’s long-term and short-term bank facilities, the company’s shares experienced a precipitous 20% decline on Tuesday, March 4.
With a stable outlook, Gensol’s long-term facilities of bank valued at ₹639.7 crore were downgraded by CARE from CARE BB+ to CARE D. Other short-term and long-term bank facilities totaling ₹76.3 crore have also been downgraded from CARE A4+ and CARE BB+. Let’s analyze the Gensol Engineering Ltd. shares in this piece of article.
About Gensol Engineering Ltd.
Since their founding in 2012 by Puneet Singh Jaggi and Anmol, the company has been relentlessly working to transform the sustainable energy industry. Their dedication to providing sustainable solutions that push limits and redefine industry standards is demonstrated by their expertise in providing procurement, end-to-end engineering, and EPC construction services for solar power projects worldwide.
One megawatt at a time, Gensol is leading the charge to fight climate change with an unwavering commitment to environmental stewardship, technology, and sustainability. Their goal is to completely transform the transition of energy, and they are dedicated to offering all-encompassing solutions that spur the clean energy ecosystem’s explosive expansion.
Gensol Engineering Ltd.’s Retail Shareholders
Over the past 12 months, Gensol Engineering Ltd.’s retail shareholding has significantly increased. According to the BSE’s shareholding pattern, Gensol Engineering Ltd.’s total retail shareholders—those with authorized share capital of up to ₹2 lakh—have virtually quadrupled in the past 12 months.
When the December quarter of 2024 ended, there were 91,015 retail shareholders who owned shares of Gensol Engineering, up from just over 19,000 at the end of the 2023 quarter. Last December, the retail shareholding was 13.94%, but now it is 23.44%, a 10-percentage point rise.
Why Did This Happen?
The ratings agency pointed out in its statement that, based on input from its lenders, the ratings had been lowered because of continuous delays in meeting the term loan commitment. The rating action complies with CARE’s default recognition policy,” a note stated. The continued delay in debt servicing indicates that Gensol Engineering Ltd.’s liquidity is still inadequate, according to CARE’s assessment. The CARE statement identifies companies like HDFC and ICICI Bank as lenders to Gensol Engineering.
Conclusion
The downgrade from CARE Ratings essentially signifies that Gensol Engineering Ltd. is having financial issues, especially with regard to its capacity to pay off its debt. As a result, the market has reacted negatively. Gensol Engineering Ltd.’s shares at ₹413 are still caught in a 20% downward circuit. Since its top of ₹1,124, the stock has dropped 63%. In the ‘A’ category of the BSE, the stock was the largest loser. As of right now, 1.48 lakh shares have been traded on the BSE, compared to an average of 28050 shares each day over the previous month.
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