Gensol Engineering shares slide 2% as NCLT reserves order on Rs 729 crore Ireda insolvency pleas

Shares of Gensol Engineering slid 2% in Thursday’s trading session to their day’s low of Rs 51.45 on the BSE, as the Ahmedabad bench of the National Company Law Tribunal (NCLT) reserved its order on two insolvency pleas filed by Indian Renewable Energy Development Agency (IREDA) against Gensol Engineering (GEL) and its subsidiary Gensol EV Lease (GEVL) over a combined loan default of Rs 729 crore..

On Wednesday, the two-member NCLT bench comprising judicial member Shammi Khan and technical member Sanjeev Kumar reserved its decision on Ireda’s plea against Gensol Engineering under Section 7 of the Insolvency and Bankruptcy Code (IBC), related to a loan default of Rs 510 crore. The tribunal also heard Ireda’s parallel plea against GEVL for a separate Rs 218.95 crore default, according to a report by the Financial Express.

Gensol Engineering did not dispute the debt or the default claims raised by Ireda during the proceedings. Instead, the company raised only technical defences, which were countered by Ireda’s legal team.

In the GEVL case, the company sought time to file an additional affidavit in response to the default claims. NCLT directed GEVL to submit its response by the end of the day. The hearing in this matter is now scheduled to resume on Friday, June 13.

Sebi red flags prompt urgency

Ireda has urged the tribunal to swiftly appoint an interim resolution professional to protect its assets in view of “the grave observations in the April 15 order passed by the Securities Exchange Board of India (Sebi),” the Financial Express reported.
Under the two petitions, Ireda is seeking recovery of a cumulative principal sum of Rs 729 crore from Gensol Engineering and its EV leasing arm.

Technical indicators

Gensol Engineering’s shares closed at Rs 51.42 on the National Stock Exchange on Wednesday. The stock has seen a steep decline, losing 82% in the past three months, 10.4% over the last month, and 9.6% in the past week.

From a technical perspective, the stock is trading below all eight key simple moving averages (SMA)—namely the 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day SMAs—signalling continued bearish sentiment in both short-term and long-term trends.

The Relative Strength Index (RSI) for the stock stands at 15.6. An RSI below 20 is considered to indicate a strongly oversold position, suggesting a potential for a technical rebound.

However, the Moving Average Convergence Divergence (MACD) is currently at -16.6 and remains below its center line, another bearish signal.

With the NCLT’s order now reserved and a crucial hearing scheduled for June 13, investors will be closely tracking further developments in the insolvency proceedings.

Also read | GIFT Nifty down 30 points; here’s the trading setup for today’s session

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)