80% crash from peak! Gensol shares turn biggest wealth destroyers of 2025; retail investor lose ₹1,200 cr

The decline in Gensol Engineering shares extended to the 16th straight session on Wednesday, March 19, as they were locked in the 5% lower circuit, reaching a new all-time low of ₹224.90 apiece. This brought their cumulative fall to 61%, while from their recent peak of ₹1,125, the shares are now down 80%, making them the biggest wealth destroyer of 2025 so far.

The sharp correction in the stock has wiped out ₹1,200 crore of retail investors' wealth, who collectively owned a 35% stake in the company as of the December quarter, according to BSE shareholding data.

The company's market capitalisation has fallen to ₹853 crore from ₹4,275 crore at its 52-week high, marking a ₹3,422 crore loss in just three weeks. The promoters hold a majority stake of 62.7%, with 81.70% of it pledged, while DIIs and FIIs owned 1.4% and 0.6% stakes, respectively, as of Q3FY25.

What went wrong?

Investor sentiment soured following ongoing delays in servicing the company's term loan obligations and allegations of falsifying debt servicing documents, which have led to credit rating downgrades from ICRA and CARE.

Moreover, the Chief Financial Officer (CFO) also resigned, impacting sentiments further. To improve its financial condition, the company announced several measures. On March 13, the company's board approved fundraising initiatives, including raising ₹400 crore through the issuance of Foreign Currency Convertible Bonds (FCCBs) and ₹200 crore through the issuance of warrants to promoters.

These measures, combined with the company’s ongoing divestments, include the sale of 2,997 electric vehicles worth ₹315 crore and the divestment of a wholly owned Gensol subsidiary for ₹350 crore, are aimed at reducing debt.

However, these efforts may not be enough to help the stock recover. In early March, ICRA Ratings downgraded the bank facilities of Gensol Engineering Limited (GEL) to [ICRA]D, while CARE Ratings 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 outlook to “CARE D” for short-term facilities.

Gensol Engineering, established in 2012, is the flagship company of the Gensol Group. It specializes in providing engineering, procurement, and construction (EPC) services to the solar power sector. In 2023, GEL was listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.