Over the past year, several publicly listed companies in India have struggled with mounting debt, leading to defaults that have shaken investor confidence. From infrastructure giants to financial service firms, debt defaults have triggered credit rating downgrades, legal battles, and operational challenges.
Following are three stocks that have reported debt defaults in the last one year:
1. Gensol Engineering Limited
In early March 2025, CARE Ratings downgraded Gensol Engineering’s long-term and short-term bank facilities to ‘CARE D’— a credit rating given to issuers who are in default or expected to be in default. This was due to ongoing delays in servicing term loan obligations. The company’s liquidity position was described as “poor,” with continued stress in debt servicing.
In response, Gensol Engineering acknowledged the rating downgrade and announced a debt reduction plan. The company outlined asset divestments, including the sale of 2,997 EVs worth Rs. 315 crore and a wholly-owned subsidiary for Rs. 350 crore, aiming to reduce debt by Rs. 665 crore and achieve a debt-equity ratio of 0.8. The firm expressed confidence in navigating this period and emerging stronger.
Gensol reported a significant growth in revenue from operations, experiencing a rise of nearly 57 percent to Rs. 345 crores in Q3 FY25, while its net profit increased around 50 percent YoY to Rs. 18 crores. The company’s debt-to-equity ratio stood at 2.33.
The stock has delivered negative returns of over 64 percent YTD, and fell by around 70 percent in the last six months. Gensol Engineering Limited is engaged in the business of Solar Consulting, EPC and leasing of Electronic Vehicles (EVs).
2. AGS Transact Technologies Limited
AGS Transact Technologies faced significant financial distress in 2025. The company’s auditors issued an adverse report after the Q3 FY25 results, raising concerns over its ability to continue operations.
The report highlighted defaults and delays in loan repayments, suspension or cancellation of GST registrations in certain states, and delays in payments of statutory dues, employee salaries, and vendor payments. Credit rating agencies India Ratings and CRISIL downgraded AGS Transact’s term loans and bank loan facilities, respectively.
As per 12th March regulatory filings, AGS Transact and its wholly-owned cash management subsidiary are actively collaborating with banking partners to restore operations across their ATM network as soon as possible.
Around 50 percent of the ATMs in their network have been migrated to banks and MSPs’ networks to minimize disruption. The company remains committed to gradually resuming operations across its network and will continue evaluating ATM migrations as needed. The company reported a consolidated net loss of Rs. 194.3 crore in Q3 FY25, compared to a net loss of Rs. 15.4 crore in the same quarter the previous year.
The stock has delivered negative returns of over 80 percent YTD, and fell by around 87 percent in the last six months. AGS Transact Technologies Limited is an integrated omni-channel payment solutions provider of digital and cash-based solutions to banks and corporate clients.
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3. Mahanagar Telephone Nigam Limited (MTNL)
Mahanagar Telephone Nigam Limited (MTNL), the state-owned telecommunications company, has also faced significant financial challenges in recent years, leading to multiple debt defaults.
In November 2024, the company defaulted on a Rs. 1,000 crore loan from Bank of India, compelling the lender to make a Rs. 200 crore provision in its financials for Q2 FY25. MTNL has been struggling with financial difficulties, reporting a loss of Rs. 3,303 crore in FY24 due to declining revenues.
As of August 2024, MTNL’s total financial debt stood at Rs. 31,944.5 crore. The company defaulted on payments totalling Rs. 5,726.3 crores, comprising a principal amount of Rs. 5,492 crores and interest of Rs. 234.2 crores. Major lenders affected include Union Bank of India (Rs. 3,480.8 crore), Bank of India (Rs. 1,039.7 crore), and Punjab National Bank (Rs. 447.6 crore).
In early February 2025, the Indian government approved a plan to raise ~Rs. 16,000 crore through the sale of assets owned by MTNL and Bharat Sanchar Nigam Limited (BSNL). This strategic move aims to address the mounting debt burdens of these state-run telecom companies.
MTNL reported a decline in revenue from operations, experiencing a fall of nearly 11.5 percent to Rs. 170 crores in Q3 FY25, while the net loss stood at Rs. 836 crores in Q3 FY25, compared to a net loss of Rs. 839 crore in the same quarter the previous year.
The stock has delivered negative returns of over 21 percent YTD, and fell by around 28 percent in the last six months. MTNL is engaged in the business of providing telecom services in the geographical areas of Mumbai and Delhi.
Written by Shivani Singh
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