Gensol Engineering Promoters Invest Rs 28 Crore Through Conversion Of Warrants

The promoters of Gensol Engineering Ltd. have invested Rs 28 crore in the firm through the conversion of warrants into equity, as per a filing on Monday.

These warrants would subsequently be converted into 4.43 equity shares at a price of Rs 871 per share, noted the filing.

This development occurs on the heels of the company's recent challenges, with credit rating agencies ICRA and Care Ratings downgrading Rs 2,050 crore of Gensol's debt — over Rs 1,640 crore in long term and over Rs 400 crore in short term debt facilities — to default status.

Gensol Engineering recently witnessed a sale of approximately 2.37% of the company's total equity shares by its promoters, to the tune of 9 lakh shares. The sale aimed at unlocking liquidity and reinforcing the company's financial foundation, as per an exchange filing on Friday. Despite the sale, the promoters continue to hold a controlling 59.70% stake in Gensol.

The company currently carries a total debt of Rs 1,146 crore against reserves of Rs 589 crore, highlighting the imbalance that has contributed to recent rating downgrades. ICRA had cited communications from Gensol's lenders regarding an ongoing delay in the debt service, despite the company's assurance in a recent analyst call of having sufficient liquidity to support operations.

The company's stock has faced significant pressure recently. Shares of Gensol Engineering have hit lower circuit three times in the past week, with the stock dropping 40.8%. Over the past 12 months, the stock has plunged by 69.80%.

On Monday, shares closed at Rs 321.90, stuck in a 5% lower circuit, as compared to a 0.41% fall in the benchmark NSE Nifty 50 index. The relative strength index was at 14.86 amid the stock's free fall in the market.