Shares of Gensol Engineering again hit a 5% lower circuit?
Shares of GENSOL Engineering, a smallcap company working in the solar sector, hit a 5% lower circuit during early trade on Tuesday, march 11, and came down to Rs 289.90. The company's promoters said that they will invest Rs 28.99 crore in the company by converting warrants into equity.
Company's board members will meet
Gensol Engineering said that its promoters are putting their faith in the company by investing Rs 28.99 crore by converting warrants into equity. The company said that the warrants will be converted into a total of 4,43,934 equity shares at a price of Rs 871 per share. Along with this, the board members of the company will discuss several other options to generate funds in the meeting to be held on march 13, including stock split and equity issuance as well as issuing foreign currency convertible bonds.
Company's valuation also fell sharply
In the last trading session, the company's shares fell by 5% to Rs 305.15. With this, the company's market capitalization has also come down to Rs 1,159.64 crore. Bids were placed for a total of 1.53 lakh shares on BSE, which resulted in a turnover of Rs 4.74 crore. During the last 10 trading sessions, the company's shares have fallen by up to 60%. This decline came after the company's promoters sold 23% stake.
Why did the company's shares crash?
The company's shares started falling when credit rating agencies CARE and ICRA reduced its rating. Let us tell you that credit ratings are given to those companies which have either defaulted or are on the verge of defaulting. ICRA has given this rating allegedly citing irregularities in the loan repayment documents. Whereas the company has clearly denied this. The company currently has a debt of Rs 1,146 crore, while the reserve is Rs 589 crore. In this way, the debt-equity ratio becomes 1.95. The company has also said that it has repaid a debt of Rs 230 crore so far in this financial year. Steps are being taken to reduce the remaining liabilities as well.
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