Gensol Engineering shares tumble 30% in two sessions; here's why

Shares of Gensol Engineering Ltd tanked 30% in two sessions after credit ratings agency CARE Ratings  downgraded the company’s long-term and short-term bank facilities due to delays in servicing its term loan obligations. Gensol stock crashed to the lower circuit of 20% at Rs 413.95 on the BSE in the previous session. In the current session, the stock tanked another 10% to a fresh 52 week low of Rs 372.60 and closed at the same level on BSE. Market cap of the firm slipped to Rs 1,415.97 crore. Total 0.20 lakh shares changed hands amounting to a turnover of Rs 75.49 lakh on BSE.

Long-term bank facilities of the company worth Rs 639.70 crore have been downgraded to CARE D from CARE BB+; stable. 

Similarly, ratings for long term/ short term bank facilities worth Rs 76.30 have been lowered to CARE D/CARE D from CARE BB+; Stable/CARE A4+, said Gensol Engineering. 

"CARE Ratings Limited has revised the ratings assigned to the bank facilities of Gensol Engineering  Limited (GEL) on account of on-going delays in the servicing of term loan obligation as per feedback from its lenders. The rating action is in line with CARE’s policy on default recognition," said the firm. 

In terms of technicals, the relative strength index (RSI) of the stock stands at 20, signaling it is oversold on charts. Gensol Engineering shares were trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Gensol Engineering stock has lost 63.88% in one year and fallen 60.27% in six months. The stock has a one-year beta of 1, indicating average volatility during the period.  

Gensol Engineering is a part of the Gensol group of companies, which offers engineering, procurement, and construction (EPC) services for the development of solar power plants.