Gensol Engineering Stocks: The promoters of Gensol Engineering have sold 9 lakh shares of the company, i.e. about 2.37% of their stake. This decision may come as a surprise to many because just a few days ago they had assured to buy back the company's shares from the market. In a statement issued on Friday, March 7, Gensol Engineering said that its promoters have sold about 9 lakh shares of the company for liquidity purposes. The amount received from this will be reinvested in the business through equity investment.
According to the company, this step has been taken to strengthen the balance sheet and increase stability. The statement said that the promoters will reinvest an amount equal to or more than the amount raised from this sale in the warrant subscription round. This will provide additional growth capital to the company.
"Post this transaction, the promoters of Gensol still hold a majority stake of 59.7% in the company," the company said in a filing to stock exchanges.
What did the promoters say?
Earlier this week, Gensol Engineering chairman and MD Anmol Singh Jaggi told our partner CNBC-TV18 that the promoters are planning to buy back shares from the open market soon. However, he did not give any specific timeline for this.
He also talked about outstanding warrants which have been partially paid. These warrants were issued at Rs 870 per share and the promoters had promised to invest Rs 130 crore through this issue. He said that 25% of this or around ₹30 crore has been paid and the remaining ₹100 crore is outstanding.
"I think we will either buy back shares from the open market to win back the confidence of our customers or infuse cash into the business by subscribing to our warrants. But as I said, I don't have an exact timeline at the moment, but we will take a concrete step by the weekend or next week," Jaggi said.
ICRA's allegations and the company's response
Credit rating agency ICRA recently accused Gensol of fraudulent loan repayment documents, after which its shares saw a huge drop. But MD Anmol Singh Jaggi completely rejected these allegations.
In response to the allegations of forgery in the loan repayment document by rating agency ICRA, Jaggi denied any wrongdoing. Jaggi said, "As far as we know, there has been no wrongdoing and we work with the highest level of ethical standards." He said that we have formed an independent committee to investigate the allegations. We are strong and we will come back.
Meanwhile, Gensol Engineering's next board meeting is scheduled for March 13, where important issues like stock split and fund raising will be discussed. The company's shares have fallen by about 56 percent in the last one month.
