'Mutually decided not to proceed': Gensol shares update on takeover of EV assets by Refex Green

Crisis-hit Gensol Engineering on Friday said it mutually decided not to proceed with the proposed asset takeover of 2,997 electric vehicles (EVs) by Refex Green Mobility Ltd (RGML). Gensol's EV assets operate on the BluSmart platform.

"RGML after constructive discussions and due consideration, has mutually decided with Gensol Engineering not to proceed with the proposed transaction for the takeover of vehicles from Gensol. This decision has been arrived at due to the evolving commitments at both ends, which would make it challenging to conclude the transaction within the originally envisaged timeline. The parties have therefore agreed to not move forward with the transaction at this stage," BluSmart's parent stated in a BSE filing.

On the stock-specific front, Gensol tumbled another 5 per cent to close at Rs 184.25. At this price, the stock has cracked 76.16 per cent in 2025 so far. Bourses BSE and NSE have put the securities of Gensol under the long-term ESM (Enhanced Surveillance Measure) framework. Exchanges put mainboard companies with a market capitalisation (m-cap) less than Rs 1,000 crore under the ESM structure.

"The stock can only see some reversal when the company can meet its debt obligations in a timely manner. Otherwise, one needs to avoid it in the medium- to short-term," Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, told Business Today.

Gensol shares started to dwindle after multiple credit downgrades by rating agencies CARE and ICRA. ICRA downgraded Gensol's loan facilities totalling Rs 2,050 crore. The long-term fund-based term loan of Rs 925 crore and the fund-based cash credit of Rs 718.5 crore were downgraded from [ICRA]BBB- (Stable) to [ICRA]D. Additionally, long-term and short-term bank guarantee (BG) facilities totalling Rs 406.5 crore, along with a sub-limit BG of Rs 51.3 crore, saw a downgrade from [ICRA]BBB- (Stable)/[ICRA]A3 to [ICRA]D.

CARE Ratings followed suit, downgrading the firm's bank facilities worth Rs 716 crore to CARE D, indicating default or high credit risk. The long-term bank facilities of Rs 639.7 crore were downgraded from CARE BB+ (Stable) to CARE D, while the long-term/short-term bank facilities of Rs 76.3 crore were also slashed from CARE BB+ (Stable)/CARE A4+ to CARE D.

For the unversed, a 'D' grade stands for default status, which implies that the company may not fulfil its loan obligations. ICRA also said it has now learnt that certain documents shared by Gensol, on its debt servicing track record, were apparently falsified, which raises concerns about its corporate governance practices, including its liquidity position. The agency mentioned that the company's unexecuted order book, which consists of 10-11 large projects, is at risk due to execution delays, regulatory approvals and potential cost overruns.

Adding to investors' worry, the company's Chief Financial Officer (CFO) Ankit Jain resigned, citing personal reasons. After this, Gensol appointed Jabirmahendi Mohammedraza Aga as the new CFO of the company, effective from March 7, 2025.