Written By- Tannu Puri
Shares of Gensol Engineering Plunge 10% After Credit Downgrade statement
Thursday, March 6, shares of construction engineering firm Gensol Engineering plunged by a further 10% following the company’s reply to previous credit downgrades. According to BSE data, the stock is currently down more than 34% in a single week. Rating firms such as CARE and ICRA decreased the company’s credit ratings, which put pressure on its stock. Gensol Engineering acknowledged the downgrades in a statement to reassure investors, stating that they were caused by a temporary liquidity mismatch that is being fixed by client payments.
Business stressed that it is dedicated to pursuing a responsible answer while addressing the issues. Additionally, it denied any involvement in charges of falsification and declared its intention to form a committee to conduct a comprehensive investigation into the issue. Gensol underlined its dedication to transparency, accountability, and environmentally friendly company operations.
₹7,000 crore order book, a 42% increase in revenue to ₹1,056 crore in the first nine months of the fiscal year, an 89% growth in EBITDA to ₹246 crore, and a 34% increase in profit to ₹67 crore were among the company’s outstanding financial results.
Gensol further highlighted its steps to improve its financial position, including a reduction of ₹230 crore in debt obligations this year and a series of asset divestments aimed at further reducing its debt. Despite these efforts, the company has a current debt of ₹1,146 crore, compared to reserves of ₹589 crore, resulting in a debt-equity ratio of 1.95.
Credit Rating Downgrades
Gensol Engineering was downgraded from a “BB+” to a “CARE D” rating by CARE Ratings on March 4, signifying a default or approaching default. The company’s long-term bank facilities, valued at ₹639.7 crore, were also downgraded from “CARE BB+” to “CARE D,” with a stable outlook.
In response to claims of debt servicing delays, ICRA Ratings downgraded Gensol Engineering’s bank facilities to [ICRA]D on March 5. Whereas the company had previously reported no defaults and had submitted documentation indicating prompt debt servicing, ICRA later found that some of Gensol’s submitted paperwork looked to be fraudulent. This generated questions about the company’s liquidity and corporate governance, specifically in light of the February 2025 debt service delays to Blusmart bondholders.
Gensol Engineering recently reaffirmed its commitment to resolving these problems and boosting its financial stability in the face of these growing barriers.
