ICRA’s move comes just a day after CARE Ratings had also downgraded Gensol Engineering over delays in its debt servicing.
In response, Gensol Engineering’s shares, which were down 20% on Tuesday, are down another 10% on Wednesday, after its circuit limit was revised lower.ICRA also wrote in its note that it has noted a deterioration in the financial flexibility of the company with an increase in promoter’s share pledge to 85.5% of its holdings in February 2025 from 79.8% in September 2024. “The increase in share-pledge amidst a continuous decline in share price of Gensol Engineering over the last few months can constrain the ability of the company to raise capital to support its future growth plans,” ICRA wrote in its note.
The rating also factors in the business linkages of Gensol Engineering with its promoter group entity Blusmart Mobility Pvt. Ltd., which is a loss-making entity and has recently delayed on its NCD payments, which, according to ICRA, can also have an adverse impact on the financial flexibility and capital raising ability of Gensol Engineering.ICRA highlighted Gensol’s latest public disclosures in its recent communication, which highlighted sizeable available liquidity to support its operations during its ongoing growth phase. It also said in its recent investor call on February 13 that the total liquidity on its books of about ₹250 crore in addition to access to working capital limits.
“Gensol had also been sharing no-default statements with ICRA at the beginning of every month suggesting timely debt servicing,” ICRA said.
ICRA has also highlighted that against expectations of equity infusion in Gensol Engineering worth ₹244 crore in the current financial year through preferential share warrants, only ₹140 crore has been infused till date, with the balance infusion to be deferred till December 2025, reflecting a delay of about one year compared to earlier expectations.
Timely infusion of equity is critical for Gensol’s growth plans, ICRA wrote, adding that the promoters’ stake dilution increases the uncertainty surrounding fresh equity infusion plan.
ICRA said that Gensol has an order book worth over ₹7,000 crore, which are to be executed over the next 12-18 months, imparting revenue visibility over the medium-term. “However, availability of funds for executing such a large order book remains unclear,” ICRA wrote.
Gensol Engineering shares are down 67% from their peak of over ₹1,100 after today’s 10% fall.
