1744719603252_1.pdf (1.2 MB)
All ValuePickr friend should read SEBI’s order on Gensol as attached. It explains how the loans sanctioned by IREDA and PFC were diverted to the promoter’s account. Shockingly, the company even forged letters from these lenders—manufacturing letter that IREDA and PFC later confirmed they never issued.
For most companies, especially from a retail investor’s perspective, one of the most important red flags should be significant promoter selling (typically 3–5%). Even if the company isn’t involved in fraud, such selling often points to overvaluation.
Take Gensol as an example—the promoter stake dropped by around 7% between March 2022 and March 2023. This kind of significant offloading should be a primary reason to exit or not to enter in stock, despite of exceptional numbers of revenue etc. The only exception to this rule is when the selling is done by a Private Equity (PE) firm—as seen in cases like Home First Finance. Over valued example is Easymytrip, stock price is halved when promoter first sold in March 2023. Always check change of promoter holdings.