Will Gensol Be Able To Drive Out of Latest Crisis?

A downgrade by ratings agency ICRA has sent the  Gensol Engineering stock on a tailspin, with the stock falling over 40% in the past four days. What’s behind Gensol Engineering’s massive stock crash? ICRA rating downgrade, governance concerns, and more

Gensol Engineering, an Ahmedabad-based company engaged in solar EPC and EV leasing, had been a well regarded firm in the sector, with a strong reputation for its solar EPC and O&M business. It’s recent move into the cab business through its all electric fleet at Blusmart, a separate firm, was seen as an extension of its green transition positioning, and until recently had received strong investor backing as well. It claimed that an electric car it had developed and shared a prototype of at the recent Bharat Mobility Expo got over 30,000 pre-bookings.   

Even in its Q3 results, the firm declared that total revenues increased 30 per cent to Rs 345 crore from Rs 266 crore in the same quarter a year ago, it said. However, a drop in Profit after tax to Rs 6 crore versus Rs 17 crore a year back was not received well by the market, leading to pressure on the stock price since.   

ICRA downgrade and corporate governance concerns

The turmoil began when the ICRA downgraded Gensol’s credit rating from BBB- (Stable) to D (Junk/Default), raising concerns over the company’s debt servicing track record and corporate governance practices. The rating agency claimed that documents shared by Gensol regarding its debt servicing were falsified, casting doubts on the company’s liquidity position.

Additionally, the ICRA highlighted a rise in the promoter’s pledge, which increased from 79.8% in September 2024 to 85.5% in February 2025. The rating agency also pointed out BluSmart’s financial struggles, noting that the loss-making EV ride-hailing company recently delayed payments on its Non-Convertible Debentures (NCDs).

Equity infusion delays and debt reduction plans

Gensol’s promoters had planned an equity infusion of Rs 244 crore in FY25 through preferential share warrants, of which Rs 140 crore has been invested so far. The remaining Rs 100 crore funding has been delayed by about a year, deviating from ICRA’s initial expectations.

In response to the crisis, Gensol has announced plans to reduce its debt by Rs 665 crore, comprising:

• Rs 315 crore from the sale of approximately 3,000 EVs
• Rs 350 crore from the sale of US operations of a wholly owned Gensol subsidiary, Scorpius Trackers

The company’s current debt stands at Rs 1,146 crore, after repaying approximately Rs 230 crore in the current financial year.

Leadership reassurance and CFO resignation

Following the credit downgrade, Chairman and Managing Director Anmol Singh Jaggi appeared on multiple business news channels, reassuring stakeholders that Gensol’s growth plans remain on track. He expressed confidence that the company would restore its credit rating within three months. While acknowledging some delays in debt repayment, he strongly denied any falsification of documents submitted to ICRA.

Meanwhile, the company’s leadership has faced recent exits. Gensol’s CFO, Ankit Jain, resigned citing personal reasons. In response, Jabir Aga, who had previously resigned as CFO in October 2024, has been reappointed to the role.

Accusations that the firm funded Blusmart from shareholder funds in Gensol don’t really hold much water on the other hand, considering that no one was complaining when Blusmart was regularly raising money through 2023-24 at ever rising valuations. The much toasted all electric cab firm was able to raise money from one of the widest set of investors without breaking a sweat, before doubts started persisting on its model.

That saw Gensol try to insulate the parent firm which makes its money from solar projects and O&M from any credit risk arising from losses at Blusmart, but clearly got caught out as markets tripped up earlier than it hoped and prayed for. Now, it has put a perfectly good renewable energy business at risk with its failure to manage the situation. 

Recent Project Wins

The turmoil at the firm places recent projects wins such as 520 MW in two separate project wins at Khavda from a PSU, a total of 500 MW of BESS projects from GUVNL and other smaller projects in the spotlight. Failure to resolve its financial troubles could force the agencies to act, leading to cancellations even, which would further roil the markets.

By Arrangement with Entrackr