Gensol Engineering shares wipe out 90% value in 10 months amid fraud concerns, SEBI clampdown

Shares of Gensol Engineering Ltd. were lock in another 5% lower circuit on Monday, April 21, having been locked in a similar lower circuit last week as well.

In the last 35 trading sessions since February 21, shares of Gensol Engineering have gained only thrice; once a 2.38% upmove on February 21, another a 5% upper circuit on March 19, and the other being a 3.45% gain on April 4.

On April 15, capital markets regulator Securities & Exchange Board of India (SEBI), had issued interim orders against Gensol Engineering and its promoters Anmol Singh Jaggi and Punit Singh Jaggi, restraining them from holding positions of a director in the company. Both have also been restrained from buying, selling or dealing in securities.

Allegations include availing loans worth ₹978 crore from IREDA and PFC and using some part of it for personal expenses. There are also allegations of round tripping of funds and fund diversion from Gensol to private entities and promoters.

With today's fall, shares of Gensol Engineering have lost 90% of their value from the all-time high of ₹1,124.90, which the stock had hit in June 2024.

Such has been the damage that the stock is now under the 'T' group of shares and has been placed under Stage 1 of the Enhanced Surveillance Measures (ESM) framework.

Stocks which are placed under the 'T' Group require mandatory delivery. They have a circuit limit of 5% and concepts of BTST (Buy Today, Sell Tomorrow) and STBT (Sell Today, Buy Tomorrow) are not applicable for such stocks. Intraday trading is barred for such stocks as well.

Gensol Engineering shares have been on a downward spiral, more so since their credit ratings were downgraded by rating agencies ICRA and CARE.

Under stage 1 of the ESM framework, the stock follows a trade-for-trade mechanism with a price band of 5%. Applicable margins will be 100% from the T+2 day. In case the security is already in a 2% price band, it stays within that.

Speaking to CNBC-TV18 post the ratings downgrades, Gensol Chairman and Managing Director Anmol Singh Jaggi had denied allegations of any wrongdoings and said that the promoters remain fully committed to the business.

Shares of Gensol Engineering are in a 5% lower circuit at ₹110.71.