March 13, 2025 – Gensol Engineering Limited is facing a challenging phase as its stock has plunged nearly 90% from its all-time high in recent months. The steep decline comes amid growing concerns over the company's financial health, operational challenges, and increasing competition in the renewable energy sector.
Adding to investor worries, multiple credit rating agencies have downgraded Gensol, citing liquidity concerns, rising debt levels, and uncertainty around its expansion plans. Despite these setbacks, the company has taken a series of strategic steps to regain investor confidence and strengthen its financial position.
At its latest Board Meeting on March 13, 2025, Gensol Engineering announced several crucial decisions, including a global fundraising initiative, stock split, preferential share allotment, and leadership changes.
Key Announcements from the Board Meeting
1. Fundraising Through FCCBs, ADRs, and GDRs
To counter financial stress and fuel future growth, the Board has approved a plan to raise up to $50 million through Foreign Currency Convertible Bonds (FCCBs), American Depository Receipts (ADRs), and Global Depository Receipts (GDRs). The issuance will be conducted through private placement or other methods, subject to regulatory approvals.
This fundraising effort is seen as a crucial step to boost liquidity, refinance existing obligations, and support expansion plans.
2. Stock Split to Increase Market Liquidity
To attract retail investors and improve liquidity, Gensol Engineering has approved a stock split in a 10:1 ratio.
Existing ₹10 face value shares will be split into 10 shares with a ₹1 face value each.
The move aims to make shares more affordable, increase market participation, and enhance trading volumes.
The record date for the stock split will be announced after shareholder approval.
3. Preferential Share Allotment to Promoter Group
The Board has approved the issuance of 3,57,14,285 convertible warrants at ₹56 per warrant (adjusted for stock split) to Jasminder Kaur, a promoter group investor.
The total amount to be raised is ₹199.99 crore.
The warrants will be convertible into equity shares within 18 months.
This move reinforces promoter confidence in the company amid market concerns.
4. Resignation of Independent Director Rajesh Jain
Independent Director Rajesh Jain has resigned, citing personal and professional commitments. While there are no reported disputes, his exit comes at a time when Gensol is under financial pressure, raising investor concerns about corporate governance.
5. Amendments to Memorandum of Association (MoA)
To align with the stock split, the company has proposed changes to Clause V of its Memorandum of Association (MoA). The new authorized share capital will be ₹75 crore, divided into 75 crore equity shares of ₹1 each.
With its stock under immense pressure and credit downgrades impacting investor sentiment, Gensol Engineering needs to execute its turnaround plans effectively. The success of its fundraising efforts, stock split, and capital restructuring will be crucial in determining whether the company can regain market confidence and stabilize its operations.
Despite these announcements stock locked in 5% lower on 13th March 2025
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