Shares of Gensol Engineering hit an all-time low of ₹334.80 in early trade today on the NSE, down 10% from its previous close of ₹372, as selling pressure intensified. The stock remains locked in the lower circuit for the third straight session, extending its losing streak to seven consecutive days.

The sharp decline follows multiple credit rating downgrades over the last few days, following concerns over its financial health and debt servicing delays.

The company’s shares have been in freefall, plunging 20% on March 4 to a 20-month low, followed by another 10% drop on Wednesday. The stock is currently down 70% from its June 2024 peak. As of Thursday, the company’s market capitalisation stood at ₹1,272.32 crore.

First, Care Ratings on March 3, downgraded the company’s rating from ‘BB+’ to ‘D’ due to ongoing delays in servicing its term loan obligations. Care Ratings highlighted that Gensol's liquidity remains poor, reflected in pending overdue payments.

The brokerage noted that for any future upgrade, Gensol must demonstrate timely debt servicing for at least three consecutive months.

Then, ICRA in a March 4 note raised serious concerns about corporate governance of GEL after discovering that certain documents shared by the company regarding its debt servicing track record were allegedly falsified.

“ICRA has now learnt that certain documents shared by GEL with ICRA, on its debt servicing track record, were apparently falsified, which raises concerns on its corporate governance practices, including its liquidity position. Further, delays in debt servicing by more than 15 days to the bondholders of BluSmart in February 2025, points to lapses in liquidity management within the group,” ICRA said.

The agency emphasised that Gensol had been submitting no-default statements at the start of each month, suggesting timely repayments, but lender feedback contradicted these claims. Consequently, ICRA assessed Gensol’s liquidity position as ‘poor.’

The brokerage also flagged Gensol’s growing financial vulnerability, worsened by its strong linkage with its loss-making promoter group entity, BluSmart. This association further constrained Gensol’s financial flexibility and capital-raising ability. Additionally, the company’s free cash flow (FCF) is expected to remain negative in FY 2026 due to its high working capital intensity and sizeable capital expenditure plans. Further compounding the situation, the promoter's share pledge in Gensol increased to 85.5% of its holding in February 2025. ICRA cautioned that this rise in pledged shares, coupled with a continuous decline in the company’s stock price, could significantly hamper Gensol’s ability to raise fresh capital.

The company’s key lenders include the Indian Renewable Energy Development Agency (IREDA), Power Finance Corporation (PFC), Bandhan Bank, ICICI Bank, and HDFC Bank.

These concerns, along with the ongoing rating downgrades, continue to put pressure on the company’s financial stability and market confidence.

In a response to these downgrades, Gensol Engineering attributed the delays in debt servicing to short-term liquidity mismatch which the company argued is improving with customer payments. Denying allegations of document falsification, the company announced a review committee to ensure transparency. In its March 5 press release, Gensol outlined a debt reduction plan to strengthen its financial position, including the sale of 2,997 EVs (₹315 crore) and a subsidiary (₹350 crore), which will cut debt by ₹665 crore and lower the debt-equity ratio from 1.95 to 0.8. The company said that it aims to achieve a zero net-debt status.

Gensol Engineering fraud

Gensol Engineering shares continue losing streak for 7th straight day to hit an all-time low