Gensol Engineering to consider 1:10 stock split, fundraising via issuance of fresh equity | Stock Market News

1:10 stock split: Gensol Engineering announced on Friday, March 7, that it’s board will consider a stock split in the ratio of 1:10 and fundraising via issuance of fresh equity shares. The development comes after the smallcap stock logged a severe rout in the last five sessions, crashing nearly 40 per cent to hit an all-time low of ₹303 per share earlier today.

Following the announcement of the company’s chief financial officer (CFO), Gensol Engineering shares dropped nearly nine per cent today, but quickly reversed losses, spiking 15 per cent from the intraday low to hit ₹352.95 per share. The company’s board will conduct the board meeting on March 13, 2025, to consider the corporate actions.

Gensol Engineering to consider 1:10 stock split, fundraising via fresh equity 

Gensol Engineering, a leading player in the renewable energy sector specialising in solar power engineering, procurement, and construction (EPC) services informed the following in a regulatory filing to the stock exchanges:

“…A meeting of Board of Director of the Company will be held on Thursday, March 13, 2025, inter alia;

(i) To consider and approve the proposal of raising of funds by way of issuance equity shares or any other eligible securities through permissible modes, including but not limited to a qualified institutions placement, preferential issue, foreign currency convertible bonds or any other method or combination of methods as may be permitted under applicable laws, subject to such regulatory/statutory approvals as may be required and the approval of shareholders of the Company.

(ii) To consider the proposal for alteration in the share capital of the Company by way of sub-division/ split of the existing Equity Shares of the face value Rs. 10 each, fully paid-up, in such manner as may be determined by the Board of Directors subject to approval of the shareholders of the company and any regulatory/ statutory approvals, as may be required under applicable law.

(iii) To convey extra-ordinary general meeting to approve fund raise, sub-division/ split of shares or any other matter of the company.”

The smallcap company also said in its exchange filing that the trading window for dealing in securities will remain closed from the market closing hours of March 7 till 48 hours after the conclusion of the board meeting.

“Further, as per the Company’s Code of Conduct for Prohibition of Insider Trading, the Trading Window for dealing in securities of the Company will remain closed with effect from close of business hours of March 07, 2025 till 48 hours after the conclusion of the meeting of the Board,” added Gensol Engineering.

Gensol Engineering Share Price Trend

On Friday, shares of Gensol Engineering opened at an al-time low ₹303 against a previous close of ₹335.35 and gained 16.46 per cent to hit an intra day high of ₹352.90 before shedding some gains to settle 4.22 per cent lower at ₹321.20 apiece on the BSE. The smallcap company commands a market cap of ₹1,220.64 crore.

The stock extended its losing streak near-term and faced intense selling pressure, crashing nearly 40 per cent in five days, 56 per cent in one month and 65 per cent in the last six months. On Thursday, shares were locked in the 10 per cent lower circuit limit for the second straight session, hitting an all-time low of ₹334.80 after domestic rating agencies CARE and ICRA downgraded the company’s credit ratings on Wednesday.

Why is Gensol Engineering in the news?

On Thursday, the company announced that its CFO and Key Managerial Personnel (KMP), Ankit Jain, had resigned with immediate effect. The resignation came at a time when the company is facing ongoing delays in servicing its term loan obligations and allegations of falsifying debt servicing documents, which have led to credit rating downgrades from ICRA and CARE.

In a filing to the stock exchanges on Thursday, the company stated that it has appointed Jabirmahendi Mohammedraza Aga as the Chief Financial Officer (CFO) and Key Managerial Personnel (KMP), effective March 7, 2025.

ICRA Ratings downgraded the bank facilities of Gensol Engineering Ltd to [ICRA]D following feedback from the company’s lenders regarding ongoing delays in debt servicing.

ICRA noted that Gensol Engineering has defaulted on its debt servicing obligations based on information received from lenders. On Tuesday, CARE Ratings downgraded the company to default from the previous “BB+.”

CARE downgraded Gensol’s long-term bank facilities worth ₹639.7 crore to “CARE D” from “CARE BB+” with a stable outlook. Furthermore, ratings for other long-term and short-term bank facilities were revised from “CARE BB+” with a stable “CARE A4+” outlook to “CARE D.”

Addressing the rating downgrades, the company stated on Wednesday that proceeds from a series of asset divestments would be used to reduce debt. The company’s total current debt stands at ₹1,146 crore against reserves of ₹589 crore, resulting in a debt-equity ratio of 1.95.

Gensol attributed the rating downgrades to a short-term liquidity mismatch, which it said was improving through customer payments. “That said, we understand the concerns these downgrades have raised and are committed to addressing them responsibly for all our stakeholders,” it said in a statement.

Gensol denied involvement in “falsification claims” and announced the formation of a committee to comprehensively review the matter, emphasizing its commitment to accountability, transparency, and sustainable business practices.

The company highlighted that it’s order book exceeds ₹7,000 crore. It has reported a 42 per cent revenue growth to ₹1,056 crore in the first nine months of the current fiscal year, an 89 per cent rise in EBITDA to ₹246 crore, and a 34 per cent increase in profit to ₹67 crore.

“In the current financial year, we have reduced our debt obligation by ₹230 crore,” the company stated, adding that it has initiated a series of asset divestments to significantly lower its debt.

The measures include the sale of 2,997 electric vehicles worth ₹315 crore and the divestment of a wholly owned Gensol subsidiary for ₹350 crore. As a result of these two transactions, the company expects its debt to be reduced by ₹665 crore, bringing the debt-equity ratio down to 0.8.

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