Gensol Engineering hits another 5% lower circuit today, crashes over 35% in a week after SEBI’s damning interim order

Shares of Gensol Engineering Ltd continued their downward spiral, hitting another 5% lower circuit on Wednesday to trade at ₹116.54 on the NSE. The stock has now declined more than 35% over the last seven trading sessions following regulatory action from the Securities and Exchange Board of India (SEBI).

The stock, which previously closed at ₹122.68 on Tuesday, has seen a consistent series of lower circuits since SEBI’s interim order against the company and its promoters. Over the last week alone, it has locked in 5% declines on six separate occasions, with only one minor gain on April 4.

What triggered the fall?

SEBI issued an interim order last week against Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, over serious allegations of fund diversion, misleading disclosures, and round-tripping of funds.

According to SEBI, Gensol availed term loans worth ₹977.75 crore, of which ₹663.89 crore was intended for the purchase of 6,400 electric vehicles (EVs). However, only 4,704 EVs worth ₹567.73 crore were actually procured, with ₹262 crore unaccounted for.

Key findings in SEBI’s order:

• Diversion of funds allegedly used for personal expenses including luxury real estate and transfers to relatives.

• Round-tripping of funds between Gensol and Go-Auto, the company supplying EVs.

• Misleading EV order claims, where Gensol cited 30,000 EV orders based on vague non-binding MoUs.

• No manufacturing activity found at the company’s reported plant during a SEBI site visit.

• Corporate actions halted: SEBI suspended Gensol’s proposed 1:10 stock split, calling it against investor interest.

Additionally, SEBI has restrained the promoters from acting as directors or key managerial personnel and prohibited them from participating in the securities market until further notice. A forensic auditor will now investigate the company’s books, with a report expected within six months.

Stock performance snapshot:

Market capitalization has shrunk to ₹4.48 billion, with investor confidence shaken due to regulatory scrutiny and unanswered questions on corporate governance.