Gensol Engineering | Management Interview
Gensol Engineering after rating agencies, CARE and ICRA downgrade the company to default grade.
The next one to lookout might be IREDA. I had shared some findings between the sketchy loan disbursement activity of IREDA to gensol some time back here .
buy additional shares with what money.
They already are pledged more than 60%. If promoter has cash, do a prefrential, put in money and ensure no default.
Building Castles in the air for last 5 years. Hoping for next set of retail chumps.
âThe more things change, the more they remain the same.â
Even in the case of Gensol ratings was only downgraded after payment defaults
I have got a question. Correct me if wrong. As per my understanding, Gensol supplies EVs to BluSmart. BluSmart needs to show some profitability for a fund raise. This would be possible if Gensol lowers lease prices. This means Gensol has to lose something for BluSmart to gain something. So both cannot win at the same time. Now the question is - Will it be a case where BluSmart winning gives more gains to promoters even if Gensol loses ? I am just trying to figure out the inclination of promoters and if there is any conflict of interest. Can someone explain?
All the typical ingredients: invoking Paternal Roots,EBITDA earnings and one thing I fail to understand why would refex pay 300 crs for 2-3 year old fleet of mostly Tata Tigor cars(3000*6=180crs max) 3-4 year car is depreciated by 50. Best part was,he says more IPOs would come.
Even I donât understand that calculation.
How can 2997 cars be sold at 300 cr.
Value per car comes more than 10 lacs in that case?
The life cycle of a car in this business is 5 year. I remember hearing this from blusmart owner itself. The depreciation can only go higher.
They are not selling the cars at full price, they are simply transferring the loan obligation of those vehicles to refex. I believe refex will take care of the monthly EMIs from here on of that 300cr loan amount, and gets to own that car fleet. Gensol wonât get any cash out of this deal, only that the EMI payment for this particular 300Cr. Loan would stop, reducing their monthly debt servicing obligation by about 20 odd crores.
Between 4:25 to 4:35 in this interview, he is agreeing that rating agency received the falsified document, but committee is formed only to check who shared the falsified document 
So net net, there is an issue with the business, if not financial mismanagement, then issue of mismanagement as all these documents should have been vetted by management before sending to rating agency.
Meaning no cash would come into the books of gensol,only interest savings on diminishing basis for the duration of the car loan. Itâs being presented by the management as if 300 crs would come into the books. Thanks for the explanation.
I donât think refex fits your definition. Theyâre seemingly very excited about this EV Leasing thing that they have expanded their fleet target to 1000 vehicles. But they donât seem very comfortable in saying publically that theyâre collaborating with BluSmart, maybe they donât want their name to get associated with BluSmart in the current scenario, but it is really amusing as to why would they have such a big commitment of 1,000 vehicles with BluSmart, when they even fear associating with them in public.
Promoters have pledged more than 80% and most of the pledging was done in last 4-5 months. Next victim will be banks/NBFC that gave loan to them. Wonât buy a single share till promoter buys it as claimed in the interview. Poor retailâŚDonât know who is buying and why they are buying
IREDA loan was for purchase of EVs, they are selling 2997 vehicles to Refex at 315 Crores & I think they own 8300 such EVs.
They have been saying that this deal will help them transfer the debt to Refex thus reducing Gensolâs debt obligation by 315 Crores. Even in the recent corporate announcement also they have mentioned that 350 Crs sale of Scorpius Trackers US sale also will be utilised towards repayment of debt.
Refex industries is also a company where the management is playing games
A few years ago, I invested in Future Consumers, averaging down till âš42 without conducting any proper research on the business. Eventually, it turned into a penny stock, and I lost so much of my capital. I now consider that loss as a tuition fee for my stock market education.
With my little experience in the market, the basic checks before diving deeper into a business like the debt-to-equity ratio, promoter pledges, and even recent earnings calls didnât give me confidence. Additionally, the promoterâs social media activity didnât provide enough motivation for me to study the business further. In hindsight, I feel good about my decision not to invest in FOMO nowadays. Sometimes, staying rational is more important than getting carried away by narratives on social media or market hype.
I sincerely hope that all investors who have faced losses in this company recover soon.
Disclaimer: Not invested, even stopped studying the business after this post.
Today new cfo has resigned.
I guess probably itâs a forced resignation on account of forged document shared to rating agency.
But having worked at corporate level.
I understand this much.
Cfo on his own couldnât have shared a document like that without consulting with md & ceo.
Canât be sure, but I was anticipating cfo resignation post jaggi acknowledged that icra has shared fake document with company and they are investigating, somehow my gut was telling me cfo or some senior member in finance department will be made an escape goat .
Took an exit today it was a heavy bullet to engulf, huge DD on entire portfolio coz of this.
members help me to clear my doubt
Thanks in advance
MD of Gensol engineering is continuously saying he will infuse money in gensol eng through warrants so the previous warrants price is 850 odd rs and currently share price is 50-60% below that price so my question is will the promoter entity will convert that warrants into shares by paying remaining 75% or 600 Rs per share
Or they can launch new warrants to himself at current market price ( 300 Rs per share) and then convert their warrants into shares? If it is allowed by regulations? Which option they have to choose?
Thanks.
My main point of question is if they are allowed to announce new warrants round to promoters while their previous warrants are still pending.
Sorry if it seems a noob question
