1:10 stock split: Gensol Engineering announced on Friday, March 7, that its board will consider a stock split in the ratio of 1:10 and fundraising via the issuance of fresh equity shares. The development comes after the small-cap stock has suffered a severe rout in the last five trading sessions, crashing nearly 40 per cent to hit an all-time low of ₹303 per share earlier today.

Following the announcement of the company’s chief financial officer (CFO), Gensol Engineering shares dropped nearly nine per cent today but quickly reversed losses, spiking as much as 15 per cent from the intraday low to hit ₹352.95 per share. The company’s board will conduct a board meeting on March 13, 2025, to consider the corporate actions, including the stock split.

Gensol Engineering to consider 1:10 stock split, fundraising via fresh equity 

Gensol Engineering, a leading player in the renewable energy sector specialising in solar power engineering, procurement, and construction (EPC) services, informed the following in a regulatory filing to the stock exchanges:

“…A meeting of the Board of Directors of the company will be held on Thursday, March 13, 2025, inter alia;

(i) To consider and approve the proposal of raising funds by way of issuance of equity shares or any other eligible securities through permissible modes, including but not limited to a qualified institutions placement, preferential issue, foreign currency convertible bonds or combination of methods as may be permitted under applicable laws, subject to regulatory/statutory approvals as may be required and the approval of shareholders of the company.

Also Read: Gensol share price tanks another 10% as debt reduction plan fails to lift sentiment; stock dips 35% in three days

(ii) To consider the proposal for alteration in the share capital of the Company by way of sub-division/ split of the existing equity shares of the face value ₹10 each, fully paid-up, in such manner as may be determined by the Board subject to the approval of the shareholders of the company and any regulatory/ statutory approvals, as may be required under applicable law.

(iii) To convey extraordinary general meeting to approve fundraise, sub-division/ split of shares or any other matter of the company.”

The small-cap company also said in its exchange filing that the trading window for dealing in securities would remain closed from the market closing hours of March 7 till 48 hours after the conclusion of the board meeting.

“Further, as per the company’s Code of Conduct for Prohibition of Insider Trading, the Trading Window for dealing in securities of the Company will remain closed with effect from the close of business hours of March 07, 2025, till 48 hours after the conclusion of the meeting of the Board,” added Gensol Engineering.

Also Read: Gensol Engineering share: Small-cap solar, EV stock jumps 6% after receipt of ₹1,061 crore project

Gensol Engineering Share Price Trend

On Friday, shares of Gensol Engineering opened at an all-time low of ₹303 against a previous close of ₹335.35 and gained 16.46 per cent to hit an intra-day high of ₹352.90 before shedding some gains to settle 4.22 per cent lower at ₹321.20 apiece on the BSE. According to stock exchange data, the smallcap company commands a market capitalisation of ₹1,220.64 crore.

The stock extended its near-term losing streak and faced intense selling pressure, crashing nearly 40 per cent in five days, 56 per cent in one month, and 65 per cent in the last six months. On Thursday, shares were locked in the 10 per cent lower circuit limit for the second straight session, hitting an all-time low of ₹334.80 after domestic credit rating agencies CARE and ICRA downgraded the company’s credit ratings on Wednesday.

Why is Gensol Engineering in the news?

On Thursday, the company announced that its CFO and Key Managerial Personnel (KMP), Ankit Jain, had resigned with immediate effect. The resignation came when the company faces ongoing delays in servicing its term loan obligations and allegations of falsifying debt servicing documents, which have led to credit rating downgrades from ICRA and CARE.

In a filing to the stock exchanges on Thursday, the company stated that it has appointed Jabirmahendi Mohammedraza Aga as the Chief Financial Officer (CFO) and Key Managerial Personnel (KMP), effective March 7, 2025.

ICRA Ratings downgraded the bank facilities of Gensol Engineering Ltd to [ICRA]D following feedback from the company’s lenders regarding ongoing delays in debt servicing. ICRA noted that Gensol Engineering has defaulted on its debt servicing obligations based on information received from lenders. CARE Ratings downgraded the company to default from the previous “BB+.”

CARE downgraded Gensol’s long-term bank facilities worth ₹639.7 crore to “CARE D” from “CARE BB+” with a stable outlook. Furthermore, ratings for other long-term and short-term bank facilities were revised from “CARE BB+” with a stable “CARE A4+” outlook to “CARE D.”

Also Read: Gensol Engineering promoter trims shareholding to reduce company’s pledged shares

Addressing the rating downgrades, the company said in a statement on Wednesday that proceeds from a series of asset divestments would be used to reduce debt. The company’s total current debt stands at ₹1,146 crore against reserves of ₹589 crore, resulting in a debt-equity ratio of 1.95.

Gensol attributed the rating downgrades to a short-term liquidity mismatch, which it said was improving through customer payments. “That said, we understand the concerns these downgrades have raised and are committed to addressing them responsibly for all our stakeholders,” it said in a statement.

Gensol denied involvement in “falsification claims” and announced the formation of a committee to review the matter, emphasizing its commitment to accountability, transparency, and sustainable business practices.

The company highlighted that its order book exceeds ₹7,000 crore. In the first nine months of the current fiscal year, it reported 42 per cent revenue growth to ₹1,056 crore, an 89 per cent rise in EBITDA to ₹246 crore, and a 34 per cent increase in profit to ₹67 crore. “In the current financial year, we have reduced our debt obligation by ₹230 crore,” it stated, adding that it has initiated a series of asset divestments to lower its debt significantly.

The measures include selling 2,997 electric vehicles worth ₹315 crore and divesting a wholly owned Gensol subsidiary for ₹350 crore. As a result of these two transactions, Gensol Engineering Ltd said it expects its debt to be reduced by ₹665 crore, bringing the debt-equity ratio down to 0.8.

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