Gensol Engineering’s stock is in free fall, with another 5% lower circuit today, adding to the company’s ongoing market troubles. The share price of the company has now declined a staggering 74% YTD.
Let’s take a look at the key reason behind the sharp decline of the share price of the company:
Gensol Engineering Shares: What’s causing the sell-off?
The sharp decline in Gensol Engineering’s stock comes amid multiple headwinds, including a major shake-up at BluSmart Mobility, a company closely linked to Gensol.
To the latest, as reported by Financial Express earlier, BluSmart has witnessed a series of high-profile exits, with its CEO Anirudh Arun, Chief Business Officer Tushar Garg, Chief Technology Officer Rishabh Sood, and Vice President of Experience Priya Chakravarthy all stepping down. Sources suggest that Nandan Sharma, formerly Vice President of Business and Operations, will take over as CEO.
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BluSmart, which has been restructuring its operations, is now at the center of a leasing deal that has raised investor concerns. As part of its restructuring, parent company Gensol Engineering is selling nearly 2,997 electric vehicles to Chennai-based Refex Green Mobility. These vehicles, which make up about 34% of BluSmart’s total fleet, will be leased back to BluSmart. The transaction, worth Rs 315 crore, is yet to receive regulatory approvals, as per the Financial Express report.
Ratings downgrade and allegations
Adding to its woes, Gensol has faced multiple credit rating downgrades due to concerns over delays in servicing its term loan obligations. Allegations of falsified debt servicing documents have further dented investor confidence. While the company has denied any wrongdoing, it has launched an internal probe into the matter.
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The numbers paint a grim picture. In just the past five days, Gensol Engineering’s share price has plunged nearly 20%. The month-long performance is even worse, with a 63% drop. Over the past six months, the stock has tumbled 76%, and on a year-on-year basis, it is down 79%. The company’s market capitalisation now stands at Rs 785.84 crore.
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