Gensol Engineering’s stock continued its downward spiral, hitting the lower circuit for the eighth consecutive session on Monday, April 21, as investors reacted to a growing list of regulatory, operational, and financial concerns plaguing the company. The share price plunged 5% to Rs 110.71, marking a new 52-week low, as panic deepened following damning observations by the Securities and Exchange Board of India (SEBI), and fears of default emerged among key lenders.
SEBI’s interim order, issued on April 15, alleged major governance failures at Gensol Engineering. The regulator stated that an NSE official who visited the company’s electric vehicle (EV) facility in Chakan, Pune, earlier this month found the site nearly non-functional. The site, which was supposed to house full-fledged manufacturing operations, had only two to three workers present. Electricity usage records revealed minimal activity, with the highest bill over the past year at just Rs 1.57 lakh in December 2024. Based on these findings, SEBI concluded there was no active manufacturing underway.
Adding fuel to the fire, SEBI highlighted that Gensol’s announcement in January 2025, which claimed the company had received pre-orders for 30,000 EVs following its appearance at the Bharat Mobility Global Expo, was misleading. Investigations revealed that these were merely non-binding Memorandums of Understanding (MoUs) for 29,000 vehicles across nine organizations, with no concrete pricing or delivery commitments. The regulator alleged that such announcements may have misled investors and contributed to share price manipulation.
In tandem with the regulatory heat, financial stress has mounted. Public sector lenders Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA) are reportedly weighing the auction of more than 5,000 EVs financed for Gensol, which were later leased to BluSmart—an EV ride-hailing company promoted by the same founders, Anmol and Puneet Singh Jaggi. BluSmart abruptly suspended operations on April 17, leading to an immediate halt in lease payments to Gensol.
This development has raised alarms that Gensol’s loan account could soon be tagged as a non-performing asset (NPA). PFC and IREDA, who funded Rs 663 crore for the EVs, are now identifying potential buyers for the vehicles to safeguard their loan exposure.
SEBI also flagged financial irregularities in Gensol’s loan utilization. Of the Rs 977.75 crore borrowed by Gensol from IREDA and PFC between FY22 and FY24, Rs 663.89 crore was earmarked for the acquisition of 6,400 EVs. However, records show only 4,704 vehicles worth Rs 567.73 crore were actually purchased. With Gensol supposed to bring in 20% equity, a total investment of Rs 829.86 crore was expected, leaving Rs 262.13 crore unexplained.
Further complicating the situation, the Jaggi brothers—who hold a 62.65% stake in Gensol, of which 81.6% is pledged—have been barred by SEBI from holding any board positions in listed entities due to allegations of insider trading and fund misappropriation.
Credit rating agencies had already downgraded Gensol’s debt to ‘D’ in March 2025, citing delayed repayments. The company is currently relying on a debt-service reserve account to manage dues, but that buffer may not last long without fresh income.
Gensol’s fall from grace—once a promising name in India’s green mobility push—highlights the risks of unchecked governance, over-leveraging, and blurred lines between promoter-run ventures.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
