The sale proceeds from his stock selling is only approx Rs 26 crores. If they plan to convert warrants to stock , they still need to arrange another Rs 70-75 crores in addition to Rs 25-26 crores obtained via stock sale. Where will this money come from? Even if we assume everything goes smoothly and they manage to infuse Rs 100 odd crores ,how much of impact would this transaction make in the fundamentals of the company?
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Also I am just trying to think from promoters perspective. Falling share price is a doom for them. Could this be a gimmick to save on mark to margin? At current valuation of Rs 1223 crores, 63% of promoter share comes to a value of 771 crores approx. They have pledged shares to 82% of this Rs 771 crores i.e approx Rs 632 crores. If he subscribes to warrants I am pretty sure we will have an upper circuit of 10% on that day itself with the gains extending in subsequent sessions. So suddenly value of pledged shares which was Rs 632 crores now becomes 757 crores (assuming stock price gain of min 20%) i.e. an increase of approx Rs 127 crore. It is even better if the stock gains more than 20%. Now 25 crores he got from sale of stocks is just a rotation of money. If he manages more 75 odd crores, then an investment of Rs 75 crores leads to increase in value of pledged shares by Rs 127 crores. Could this be the game ? I may be wrong and would like to know the opinion of others.
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This calculation is true for ultra short term but everyone including promoters know that only fundamentals matter in long term. So, a lot depend on the debt reduction which they are contemplating through refex deal and sale of scorpious trackers.
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Promoter infused 29 crore rupees into the books by way of warrants at a price of 871. This news came after the stock hit a lower circuit down to 305.
Good move and induces some confidence to investors, customers and lenders. More such needed.
Disc: invested
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This raises disclosure issues with respect to companyâs filings with stock exchanges at the end of September 2024 when it disclosed the limited review balance-sheet. At that time, the company had declared cash and cash balances to the tune of Rs 256.59 crore, with Rs 35.36 crore in fixed deposits of tenor less than three months, and Rs 190.35 crore in similar instruments with maturity between 3â1
Read more at: Gensol Engineering And The Curious Case Of Rs 250 Crore Missing Cash
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Gensol Engineering Crashes: What Should Investors Do? | All You Need To Know On Know Your Company
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Shares of Gensol Engineering Ltd. have declined 56% in just over a month, wiping off Rs 1,600 crore of market capitalisation.
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This free fall is not part of the Indian market sell off, but rather multiple factors pertaining to the companyâs debt repayments that have shaken investor confidence.
Exited gensol with huge losses will be on side ways till there is more clarity about this 250cr
I have researched for days about this company and built very very strong conviction itâs a very big lesson for me to not invest in companies with CG issues and high debt
Took this decision as it looks like the scale of fudging the books looks very big from above article that 250cr cash is missing
No fundamentals can save when books are fudged at this scale and I have doubts on order book now as it could be hyped up too and could be just on paper
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I hope there is some action on jaggi as many innocent investors invested in this company with 60-70% of portfolio purely as they got attracted to social media hype and his tweets etc
Though I feel he is one of the most talented entrepreneur in India and gensol was first to get many projects like in green hydrogen and bess etc
Ethics are imp for a person than talent thatâs what this whole scenario proves to us
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Is any forum member trying to reach gensol engg investor relations person? Kindly do share the reply if heâs replied to anyone about recent developments
Thanks
Basically there is no point in reaching out to them if they have fudged accounts at this scale
They will bluff the answers and tell only what we want that every this ok etc etc
Likewise exited at a huge Draw down, & ironically I had biggest exposure to this script, due to fancy order book, expected future earnings and cash flows, nevertheless a lesson.
Order book may be genuine, but :
- Given business doesnât have working capital, they wonât be able to execute the orders.
- With default rating, no institute would fund it for the WC requirement or order book execution, so orderbook is worthless, when you donât have money to execute the order.
- The only way it could do its operations is if promoter infuses cash, since promoter also sells shares to pump cash into business( which only if he does) doesnât suffice the need.
- Or they do asset sales quickly to fulfill the WC requirements, but any such deal may take months or quarters to go through and by that time, half of the orders due to not being executed may get cancelled.
And add to that fraud as being accused by crysil, there is no clarity on that.
Itâs prudent to not get into a company with so many problems, which can go bust if it doesnât get the money and venues for getting money for them arenât enough.
I wonder why didnât they try to raise money via rights ?
Iâm not getting into this stock unless I donât see atleast a 1000 cr pumped into the company for WC thatâs the minimum I expect for an order book of 7k cr, & with pledges being revoked.
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My 2 cents:
Even after all this fiasco, even after losing money here, why anyone have to again buy this business.
Lesson learned, tuition fees paid, better move on and find another opportunity/company where u can earn better returns.
Just watch from the sidelines how this story unfolds, new stories being told once again, How the ones still holding/invested keep on defending, searching for every bit of news, micro analyzing everything that being said on TV, I know it is very very hard to digest, but itâs part and parcel of Investing.
Once Market is skeptical about a business & its Managements Integrity, it takes years if not decades to get it back.
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680ab4cf-9bb0-4ca3-95dd-a975b9617916.pdf (682.6 KB)
Very positive move
Promoters will infuse 200 Cr and they issued warrants at 86% premium
Today board meeting:
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Foreign fund raise and listing on NASDAQ: USD 50 million or âč 450 crores.
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Share Split 1 share will be split into 10 in three months time
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Warrants of 200 crores. But this will be after 3-4 months afer share split.
The above news did not move the stock is still in LC at âč 262
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If at all market reacts positively to this development this should be considered as an opportunity to exit for good by those who are still invested and thereby reduce losses . This company lacks fundamental ingredients to make a profitable enterprise and that is the reason why they have screwed not 1 but 2 companies (BluSmart is another one). A simple point should be remembered - If you give more money to dishonest and incapable people to come out of problems, they will only end up magnifying losses. If they had the knack to build a profitable company they wouldnât be in this situation in the first place.
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Just curios, why they issued âforeign currency convertible bondsâ. That seems a little unusual, especially 400 Cr. under this category.
Wonder which foreign investors will invest in their FCCBâs? Keeping in mind recent developments (default ratings,cg issues, current debt,liquidity issues)
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We expect liquidity challenges for next the 90 days till when credit rating agencies can review their outlook.
When asked if the pressure of BluSmartâs operations was being borne by Gensol Engineeringâs balance sheet, Jaggi said the arrangement was already in the process of being wound down. He said the companyâs solar project contracting business was secure and had predominantly public sector companies as customers.
âFrom April 1, 2024, no additional vehicles have been leased from Gensol Engineering to BluSmart,â he said. âAlso 3,000 vehicles are being sold out of those 5,500.â
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@Santhoshinvest - It need courage to accept mistakes. Bravo.
I also made similar mistakes, not in gensol but in other stocks due to my âhigh convictionâ. High conviction is like positive thinking, marketed by so called motivational speaker. High conviction blocks our mind from negative apsects and we are so connected to idea and not able to judge / research / listen negative aspects of idea/stocks. So as per me we should have reasonable conviction and should have doubt in our conviction which enable us to go deep with balance mindset. Just my thought, think to share with vp friends.
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