Gensol Engineering share price hits 5% upper circuit despite IREDA's insolvency move
Even as the state-run Indian Renewable Energy Development Agency (IREDA) filed an insolvency application against Gensol Engineering, optimism in the stock price followed the company's announcement that the Securities Appellate Tribunal (SAT) had granted it two weeks to respond to SEBI's interim order.
On April 15, the market regulator Securities and Exchange Board of India (SEBI), in an interim order, barred Gensol's promoters—Anmol Singh Jaggi and Puneet Singh Jaggi—from trading in the securities market and from holding any key managerial position in Gensol or any other listed company. SEBI also ordered a forensic audit.
The investigation found that the promoters of the cleantech firm had siphoned off loans from state-run lenders Power Finance Corporation (PFC) and IREDA for unrelated and personal expenses.
According to SEBI, between FY22 and FY24, IREDA and PFC lent Gensol ₹ 311.5 crore and ₹ 352.4 crore, respectively, to purchase electric cars for its EV-based ride-hailing business, BluSmart.
Gensol added another ₹ 166 crore in equity capital, bringing the total to ₹ 829.9 crore. However, the company reportedly bought only 4,704 cars for ₹ 567.7 crore—leaving ₹ 262.1 crore unaccounted for.
The Indian Renewable Energy Development Agency (IREDA) on Wednesday filed an insolvency application against the embattled Gensol Engineering for a default of ₹ 510 crore, according to an exchange filing by the clean energy-focused lender.
This development comes nearly three weeks after IREDA filed a complaint with the Economic Offences Wing (EOW) of the Delhi Police against Gensol Engineering for allegedly submitting falsified documents and diluting promoters' shares without the lender's approval.
"In furtherance to our earlier letter dated April 25, 2025, with respect to M/s Gensol Engineering Limited, this is to inform you that the Company has filed an application today, i.e., May 14, 2025, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Gensol Engineering Ltd., for an amount of default of ₹ 510,00,52,672 (Rupees Five Hundred Ten Crore Fifty-Two Thousand Six Hundred Seventy-Two Only)," the exchange filing stated.
While informing the exchanges of its complaint with the EOW on April 25, IREDA had said that Gensol's account is currently under stress but has not yet been classified as a non-performing asset (NPA). It also mentioned that it has initiated an internal review in line with RBI guidelines and the company's due diligence protocols.
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