Gensol shares fell 68%, prompting creditors to seize 7% of promoters to guarantee shares
Last week, creditors led by Virtue Financial Services Private Ltd and SICPA India Pvt Ltd cited 4.3% and 1.19% of guaranteed shares, respectively, according to exchange data on March 17. Earlier this month, Badjate Stock Broking Pvt. Ltd cited 1.47% of the promoter’s shares, meaning that the three creditors have acquired 6.96% of Gensol shares since the two rating agencies took action, first raising the problems facing the Ahmedabad-based company.
Since early this month, Anmol Jaggi and his younger brother Puneet Jaggi have been working to retain control over solar engineering, procurement and construction, as well as the electric car rental company they co-founded in 2012.
The two brothers managed to obtain 0.4% of the shares issued from Shine Star Build Cap Pvt Ltd, a non-resident non-bank finance company based in Delhi.
However, the stock price rose 82% from its peak ₹On February 20 last year, 1,377.1 forced the co-founders to make more money from lenders because the stock is worth less than the promised stock. This forced Jaggi Brothers to secure 6.23% of the stock between January 1 and March 8, according to MINT research. As the promoters secured 81.7% of stock at the end of December last year, the promoters’ overall commitment rose to about 88% before three creditors took action last week.
The immediate impact of creditors on these actions is Gensol’s ownership. Gensol promoters sold 2.37% of their shares on March 7 and lost control of 6.96% of their shares, meaning that the founders lost 9.37% of their shares in nine trading days since the downgrade of Care Ratings Ltd since March 3. ₹The 716 million bank loan default was the reason for “repairing the term loan obligation”.
ICRA Ltd followed the next day, saying Gensol was “apparently forged” information about its debt services.
Denied misconduct
Gensol denies misconduct and guarantees investors plan to clear their current debt ₹11.46 million. The company intends to bring more money by prioritizing the distribution of promoters’ shares and selling some of its electric cars to Blu-Smart.
Delhi-based financial services company Virtue Financial Services, owns 4.3%, is Gensol’s largest public shareholder. Nagpur-based Badjate Stock Brokerage, at 1.47%, becomes the second largest public shareholder. SICPA India is the Indian division of Swiss security ink currency maker SICPA, which is the third largest shareholder at 1.19%.
Email sent to Mayank Khemka of Virtue Financial, Arun Vij, managing director of SICPA India, received no response.
Gensol did not comment on the latest share cited by creditors.
A Gensol spokesman told MINT last week: “The commitment of the stock is mainly due to the additional collateral given to existing lenders due to the decline in stock prices.”
Anmol guaranteed 0.88% with SICPA India on August 7 last year ₹955. ₹540. Anmol guaranteed 1.45% on Virtue Financial Services on December 26 last year, followed by another commitment of 0.55% on February 13, 0.92% on February 18 and 0.97% on March 5. Gensol Stock Trading ₹720, ₹610, ₹550 and ₹December 26, February 13, February 18 and March 5, 372.
Similarly, Anmol signed 1.11% on June 4 last year with a Badjate stock brokerage, followed by an additional 0.05% commitment on November 19. Gensol’s share is ₹June 4, 925, ₹November 19 760.
Gensol’s stock ended on Monday ₹248.65 on BSE, which is the lowest in about 32 months. The stock is over ₹July 18, 2022 238.8.
“The loan-to-value (LTV) ratio increases as stock prices fall, so the founder and managing director of Bangalore Consulting, told MINT last week MINT last week.
LTV is a percentage of the amount borrowed compared to the value of the collateral (such as stock).
