The shares of one of the leading Infrastructure stocks, specialising in providing engineering, procurement, and construction (EPC) services to renewable energy and the solar power sector, are in focus upon approval of several key decisions of the management.
Price action
With a market capitalization of Rs. 994.52 crores on Thursday, the shares of Gensol Engineering Limited hit a 5 percent lower circuit making a low of Rs. 261.70 per share compared to its previous closing price of Rs. 275.45 per share.
What Happened
On March 13, 2025, the Board of Directors of Gensol Engineering Limited approved several key decisions upon facing multiple downgrades because of delays in paying back its loans and receiving backlashes from the public.
ICRA accused the company of falsifying documents related to its debt payments and downgraded its rating to “default.” CARE Ratings also downgraded Gensol from ‘BB+’ to ‘default.’ As a result, Gensol’s stock price dropped as investors sold off their shares.
The company’s Key Decisions
The company’s board of directors approved two fundraising initiatives: raising Rs 400 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs) and Rs 200 crore through issuing warrants to promoters.
It also approved a 1:10 stock split, altering the capital clause of the Memorandum of Association, where one existing equity share of face value Rs. 10 will be split into ten new equity shares of face value Rs. 1 each.
Furthermore, they also approved the issuance of up to 3.57 crore warrants to the promoter group on a preferential basis. Additionally, the resignation of Independent Director Mr. Rajesh Jain was acknowledged.
Management words on key decisions
The company stated that this move shows its dedication to achieving steady growth, reducing debt, and increasing value for its stakeholders. It also mentioned that, along with selling vehicles and a subsidiary, these actions will improve Gensol’s debt-to-equity ratio, making it financially stronger in the long term.
Impact on Fundrise
Gensol Engineering plans to raise Rs 600 crore, which will significantly improve its financial position. With the fundraise, the company’s reserves will rise to Rs 1,200 crore, and its debt will reduce to around Rs 530 crore, improving its debt-equity ratio from 1.95 to 0.44.
Additionally, the company plans to split its shares in a 1:10 ratio to make shares more affordable for retail investors and increase liquidity. This move is aimed at broadening the shareholder base and improving the company’s marketability.
Gensol Engineering at a glance
Gensol Engineering has a strong foundation in technical advisory services and has grown significantly over the years. The company currently boasts over 33,693 MW+ in its portfolio. In the trailing twelve months (TTM), it has reported a total revenue of Rs. 1,477 Crore and has an unexecuted order pipeline worth Rs. 3,400 Crore.
The company also has contracts worth over Rs. 2,000 Crore under award and a total renewable revenue visibility exceeding Rs. 8,300 Crore.
Financials
The company’s revenue rose by 52 percent from Rs. 227.13 crore to Rs. 345.34 crore in Q3FY24-25. Meanwhile, Net profit rose from Rs. 13.12 crores to Rs. 16.91 crore during the same period.
Written by Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
