Gensol Engineering's retail, FII holdings spiked weeks before Sebi crackdown
Retail and foreign institutional investors significantly raised their stakes in Gensol Engineering during the January–March 2025 quarter, weeks before Securities and Exchange Board of India (Sebi) issued a scathing interim order against the company for fund diversion and severe corporate governance lapses.
ADVERTISEMENT According to the latest shareholding pattern, the retail investors, defined as resident individuals with holdings up to Rs 2 lakh, increased their stake from 23.44% in December 2024 to 30.68% in March 2025, a steep 7.24 percentage point quarter-on-quarter jump.
At the same time, foreign institutional investor (FII) holding also surged, rising from 0.63% to 4.88% in the same period.
This build-up in public shareholding occurred prior to Sebi's public order on Gensol, raising serious concerns about information asymmetry, timing of disclosures, and whether retail investors unknowingly entered the counter while corporate misconduct brewed beneath the surface.It is interesting to note that between FY20 and FY25, promoter holding dropped from 70.72% to 35%, even as revenues rose from Rs 61 crore to Rs 1,152 crore. Even on a quarter-on-quarter basis, the company's promoter shareholding witnessed a decline. The promoter shareholding for the quarter ended March 2025 stood at 35.87%, significantly down from 62.65% at the end of the December 2024 quarter.
ADVERTISEMENT
Also read: ETMarkets Smart Talk: Harshad Patwardhan, managing Rs 1591 cr AUM, offers playbook for creating wealth with sector-focused strategy
In January, Gensol announced a 1:10 stock split, which made its shares more affordable for small investors. The move coincided with a broader rally in clean energy and EV stocks, and Gensol, with impressive top-line growth, fast became a retail favorite.
ADVERTISEMENT By March-end, the company's investor base had widened, retail interest had soared, and FII presence had grown. However, it should be noted that this increasing investor participation occurred just before Sebi revealed the extent of financial irregularities and fund diversion at the company.Sebi's investigation, triggered by a complaint in June 2024, culminated in an interim order in April 2025, revealing that Gensol diverted Rs 977.75 crore in loans from IREDA and PFC, meant for electric vehicle procurement. Only 4,704 out of 6,400 planned EVs were actually bought.
ADVERTISEMENT Over Rs 200 crore was found unaccounted for, allegedly routed through Go-Auto and Capbridge Ventures, promoter-linked entities. The funds were allegedly used for luxury personal expenses, including a DLF Camellias apartment and a Rs 26 lakh golf set.In its order, Sebi accused the promoters of treating Gensol as a personal piggy bank, cancelling the stock split, ordering a forensic audit, and barring both Anmol Singh Jaggi and Puneet Singh Jaggi from the securities market. The regulator also cited falsified documents, a breakdown in internal controls, and gross misuse of company funds.
Additionally, it should be highlighted that earlier in the month of March, CARE Ratings downgraded Gensol's credit ratings of bank facilities totaling 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 downgraded from CARE BB+ (Stable)/CARE A4+ to CARE D.
ADVERTISEMENT
Also read: Warren Buffett now owns 5% of all US Treasury bills, a larger holding than the Fed itself
ICRA also downgraded the credit ratings of various loan facilities amounting to Rs 2,050 crore. The long-term fund-based term loan of Rs 925 crore and fund-based cash credit of Rs 718.5 crore were both downgraded from [ICRA]BBB- (Stable) to [ICRA]D.Similarly, long-term and short-term bank guarantee (BG) facilities totaling Rs 406.5 crore and a sub-limit BG of Rs 51.3 crore were downgraded from [ICRA]BBB- (Stable)/[ICRA]A3 to [ICRA]D.Many investors entered the stock just before governance issues surfaced, amplifying their exposure to risk.Analysts say that this is not a case of poor timing, it's a failure in transparency, as the data clearly shows that thousands of investors walked into the stock unaware of what was brewing inside.Veteran investor Vijay Kedia warned of more 'Gensols' in the making, and Sebi echoed concerns that stock splits and aggressive capital raising can attract small investors to companies with opaque operations.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


India Today
an hour ago
- India Today
Samsung Galaxy S24 price drops by Rs 36,600
Samsung Galaxy S24 price drops by Rs 36,600 By Ankita Garg The Samsung Galaxy S24 is available on Amazon with a massive discount offer, that too without any terms or conditions. Amazon is not even running any sale and is directly offering a big discount on it. The Samsung Galaxy S24 is currently listed on Amazon at a discounted price of Rs 43,397. (Marble Gray colour model) To recall, the Samsung Galaxy S24 was launched in India at a starting price of Rs 79,999. This means that consumers are getting a flat discount of Rs 36,602 without any terms or conditions. At the moment, there is no bank offer available, but the deal is already quite attractive for those who have been planning to buy this at a lower price. It is worth noting that the mentioned offer is for the 128GB storage model. Other storage models have also received discounts on Amazon. The Galaxy S24 comes in four colour variants: Amber Yellow, Cobalt Violet, Marble Grey, and Onyx Black. Since this is a flagship, you can expect powerful performance out of the box, be it gaming or general tasks. The Galaxy S24 has a 6.4-inch display, which is great for binge watching and quite bright outdoors. The colours are rich and the panel has minimal bezels around it. For your reference, the Galaxy S24 is powered by Samsung Exynos 2400 SoC and a 4,000mAh battery.


Time of India
an hour ago
- Time of India
DCM Shriram to buy Hindusthan Specialty Chemicals
Representative image NEW DELHI: DCM Shriram on Thursday said its board has approved a definitive agreement to acquire Hindusthan Specialty Chemicals for Rs 375 crore, marking its strategic entry into the advanced materials segment. The buyout of unlisted subsidiary of Hindusthan Urban Infrastructure is subject to regulatory approvals. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now


Time of India
an hour ago
- Time of India
Rs 50 QR stickers and student coders: PU to regulate 4-wheeler entry
1 2 Chandigarh: At Rs 50 per student vehicle, Panjab University is finally putting a system in place to make four-wheelers on campus less freewheeling. After fight at Gate No 2 on intervening night of June 8-9, which police claimed to be a road rage incident involving outsiders, PU is expediting a digital sticker system designed to track and regulate student vehicles more effectively. The university has floated a quotation for printing 4x4 inches QR-code-enabled stickers, initially 4000, each linked to a student's PUPIN or registration number. Once a student graduates or leaves the university, their sticker will automatically deactivate, cutting off vehicle entry. The system is intended to close loopholes that have allowed outsiders to enter the campus even during checks. The quotes have been requested by June 27 to be sent to the office of Dean Student Welfare. 'High Grade Reflective Stickers With QR Scanner, Hologram and with strong gumming'- the performa states. "We are finalising the system this time with all checks in place. Outsider vehicle entry has to be curbed, and this solution is being implemented keeping students' needs and campus security in mind," said Dean Student Welfare Prof Amit Chauhan. To execute the technical backend, two Computer Science students from the university will be assigned the task of generating QR codes and linking them to the PU database. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với sàn môi giới tin cậy IC Markets Tìm hiểu thêm Undo They will receive Rs 100 per hour each for their work, with maximum of Rs 4000 per month. The university has also revived its long-abandoned paid parking policy with the Vice-Chancellor Prof Renu Vig approving the plan put forward by PU security faculty incharge Prof Dinesh Kumar. A formal tender process for establishing paid parking zones across the campus is about to begin. The system will work in tandem with the sticker mechanism to ensure better traffic and space management. Meanwhile, rules that currently prohibit hostel residents from owning four-wheelers are also being reviewed. Many hostellers continue to keep cars despite the restriction, and now the university is considering formalising a system to accommodate them. A meeting scheduled for next week will discuss identifying hostel-wise parking areas and issuing stickers accordingly, based on available space and priority — with research scholars first, then PG and UG students. Implementation of both the sticker system and paid parking is expected to begin before the start of the next academic session. BOX 1: Key features of PU's vehicle sticker system Cost: Rs 50 per sticker QR code linked to PUPIN/registration number Auto-deactivates on course completion Objective: Limit entry to authorised vehicles only BOX 2: Student tech behind setup Two students from the Computer Science department will be tasked with generating the QR codes and linking data to the central database. They will each be paid Rs 4000 from the DSW budget for their work. BOX 3: Hostel parking under review Although current rules prohibit hostel residents from keeping four-wheelers on campus, many students continue to do so. The university is now formally considering a provision to regulate this. A meeting has been scheduled for next week to discuss the proposal. Under the plan, each hostel will identify available parking space, and vehicle stickers will be issued based on that capacity. A parking fee will be charged, and stickers will be allotted in order of priority — research scholars first, followed by postgraduate and then undergraduate students. Confirming the move, Dean Students' Welfare Prof Amit Chauhan said, "If space is available, we may allow parking with proper regulation and priority." Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .