
There has been no respite for crisis-hit Gensol Engineering Ltd as two more of its independent directors have resigned with immediate effect. "We wish to inform you that Harsh Singh and Kuljit Singh Popli, have tendered their resignation as the Independent Director of the Company, with immediate effect. Consequently, They shall also cease to be a Member of the various Committee of the Company," a BSE filing stated on Thursday. Prior to this, Arun Menon stepped down as the independent director a couple of days back.
Gensol shares slumped another 5 per cent yesterday to hit a new 52-week low of Rs 117.50. At this value, the stock has crashed 84.80 per cent in the calendar year 2025 so far. The recent beating for the stock came after the Securities and Exchange Board of India (Sebi) barred Gensol and its promoters -- Anmol Singh Jaggi and Puneet Singh Jaggi -- from participating in the securities markets due to allegations of fund diversion and issues related to corporate governance.
In addition, Sebi has decided to put on hold the stock split (1:10) exercise announced by the company last month. "It must be mentioned that Gensol recently announced a stock split of its shares in the ratio of 1:10, which is likely to attract more retail investors to the script. At this stage, allowing this corporate action may not be in the interest of the investors," the market watchdog stated.
Sebi alleged Gensol's promoters diverted hundreds of crores raised for electric vehicle (EV) procurement into personal indulgences such as luxury real estate and questionable transactions with related entities.
Between FY22 and FY24, the firm raised Rs 977.75 crore in term loans from two government lenders -- IREDA and PFC -- ostensibly to procure 6,400 electric vehicles (EVs) for leasing to BluSmart, Gensol's parent.
However, supplier Go-Auto said only 4,704 EVs worth Rs 567.73 crore were actually delivered. That left Rs 262 crore unaccounted for after more than a year from receiving the final loan tranche.
The regulator also flagged false disclosures, including inflated pre-order claims and non-binding agreements passed off as confirmed business.
Market experts suggested avoiding the stock at current levels. Investors should focus on quality stock instead of Gensol shares, said Gaurang Shah, Senior VP at Geojit Financial. "Buy quality and don't buy quantity. Equity market is exposed to all kinds of risks, both local and global. Be careful about what you buy. Just don't buy something which has corrected sharply from let's say Rs 1,000 levels as the stock value can further diminish," he stated.
"The stock is currently locked in lower circuits, preventing shareholders from exiting their holdings. Overall, the market sentiment remains negative and it is not recommended for portfolio inclusion at this stage. Sentiment indicators suggest it remains in the oversold zone, with further corrections expected. Given the heightened volatility, investors should exercise caution," said Ravi Singh, SVP - Retail Research at Religare Broking.
The Sebi blow is not the only one for the company as it recently received a setback after mutually deciding not to proceed with the proposed asset takeover of 2,997 electric vehicles (EVs) by Refex Green Mobility Ltd (RGML).
The firm, already weathering a financial storm, faced multiple credit downgrades from rating agencies CARE and ICRA. ICRA downgraded Gensol's loan facilities totalling Rs 2,050 crore. The long-term fund-based term loan of Rs 925 crore and the fund-based cash credit of Rs 718.5 crore were downgraded from [ICRA]BBB- (Stable) to [ICRA]D. Additionally, long-term and short-term bank guarantee (BG) facilities totalling Rs 406.5 crore, along with a sub-limit BG of Rs 51.3 crore, saw a downgrade from [ICRA]BBB- (Stable)/[ICRA]A3 to [ICRA]D.
CARE Ratings followed suit, downgrading the firm's bank facilities worth Rs 716 crore to CARE D, indicating default or high credit risk. The long-term bank facilities of Rs 639.7 crore were downgraded from CARE BB+ (Stable) to CARE D, while the long-term/short-term bank facilities of Rs 76.3 crore were also slashed from CARE BB+ (Stable)/CARE A4+ to CARE D.
A 'D' grade stands for default status, which implies that the company may not fulfil its loan obligations.