Gensol Engineering Limited has announced that its Board of Directors has approved a Rs. 600 crore fund-raising initiative aimed at improving the company’s financial health and reducing debt. The decision, made in a board meeting earlier today, reflects Gensol’s commitment to sustainable growth and maximizing stakeholder value.
As part of the approved plan, the company will raise funds through two channels:
- Rs. 400 crore to be raised through the issuance of Foreign Currency Convertible Bonds (FCCBs); and
- Rs. 200 crore to be raised through the issuance of warrants to promoters.
In addition to the fund-raising initiative, Gensol is pursuing strategic divestments, including the sale of vehicles and a subsidiary. These efforts are expected to significantly improve the company’s debt-equity ratio, reinforcing long-term financial stability.
Key financial impact of the fund-raise and divestments:
- Currently, Gensol Engineering has a debt of Rs. 1,146 crore against reserves of Rs. 589 crore, resulting in a debt-equity ratio of 1.95.
- With this announcement of Rs. 600 crore fund-raise, the company’s reserves are expected to increase to approximately Rs. 1,200 crore.
- Additionally, with Rs. 615 crore of divestments underway, the company’s debt will be reduced to approximately Rs. 530 crore.
- These measures will lead to a significantly improved and healthy debt-equity ratio of 0.44.
Speaking on the development, Anmol Singh Jaggi, Managing Director at Gensol Engineering Limited, stated: “Our foremost priority is to strengthen Gensol’s balance sheet, and we are taking bold and decisive steps to address it starting with this fund-raise. This Rs. 600 cr. fund-raise, coupled with the strategic divestments, will be crucial in strengthening and positioning the company for sustained growth. For years, we have delivered high value to our shareholders, and that remains our top priority. We are sharply focused on achieving a net-debt zero status, maintaining financial discipline, and unlocking even greater potential for our investors.”
With these initiatives, Gensol aims to enhance financial resilience and support its long-term expansion goals.
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