Once a market favourite, now in freefall. Gensol Engineering share price has seen a rather rough ride in the past 40 days. The stock has plummeted from four-digit peak to rock bottom below Rs 100 a share and has left investors stunned and worried. The recent directive from SAT denying any interim relief further added to the worries.
Just a few months ago, Gensol’s share price was tarding at a 52-week high of Rs 1,124.90. Today, it’s languishing at Rs 59.78, locked in its 20th straight lower circuit. That is a massive 94% decline from its 52-week high.
SAT refuses to give relief
Adding to its woes, things went from bad to worse when the Securities Appellate Tribunal (SAT) refused to offer any interim relief. Gensol had appealed against SEBI’s order, calling it hasty and unfair. The company claimed that it was not given a proper chance to respond and that the crackdown was hurting its business.
But SAT was not convinced. It asked Gensol to file its formal reply within two weeks and allowed SEBI four weeks to come out with its final order.
Why is Gensol Engineering stock price falling continuously
The sharp slide began after the markets watchdog, SEBI, dropped the hammer on the company in April. It accused Gensol and its promoters of diverting funds, forging documents, and misleading regulators and investors. The allegations sent shockwaves through Dalal Street, triggering a relentless sell-off.
Adding to this, the market regulator did not stop at just accusations but also it barred the company and its promoters from accessing the securities market. This in a simpler way means that the company could not raise funds or trade freely, further adding to the chaos.
Trouble from all sides
Complaints have now been filed with the Economic Offences Wing. Lenders like IREDA and PFC have distanced themselves from the repayment certificates Gensol claimed to have received. These were allegedly forged to hide payment defaults.
Adding to the mess, the Ministry of Corporate Affairs has opened its own investigation, and Gensol’s top promoter, Anmol Singh Jaggi, has been barred from executive roles in any listed firm.
The Rs 978 crore loan mystery
At the centre of the controversy is a hefty Rs 978 crore loan taken for buying electric vehicles (EVs). The funds were meant for leasing 6,400 EVs to its affiliate BluSmart Mobility. However, SEBI claims Gensol bought only 4,700 EVs and can noy account for Rs 262 crore even after a year.
Apart from this, some of that money, SEBI says, might have gone into luxury property deals and payments to companies linked to Gensol’s promoters.