The shares of one of the leading Infrastructure stocks, specializing in providing engineering, procurement, and construction (EPC) services to renewable energy and the solar power sector, hit 5 percent lower circuit as SEBI Bans Promoters from the Securities Market.
Price action
With a market capitalization of Rs. 469.90 crores on Wednesday, the shares of Gensol Engineering Limited hit a 5 percent lower circuit, making a low of Rs. 123.65 per share compared to its previous closing price of Rs. 130.15 per share.
What went wrong with Gensol?
CARE Ratings downgrade: In early March 2025, both CARE Ratings and ICRA downgraded Gensol Engineering’s long-term and short-term bank facilities from BB+ (Stable) to ‘CARE D’— a credit rating given to issuers who are in default or expected to be in default. This was due to ongoing delays in servicing term loan obligations. ICRA also reported that certain documents provided by Gensol regarding its debt servicing track record were falsified, raising corporate governance issues.
Fundraising & Asset Divestment Plans: In response, Gensol Engineering acknowledged the rating downgrade and announced a debt reduction plan. The company’s board approved several measures, including raising Rs. 400 crore through Foreign Currency Convertible Bonds (FCCBs), issuing warrants worth Rs. 200 crore to promoters, and divesting assets such as selling 2,997 EVs valued at Rs. 315 crore and a wholly owned subsidiary for Rs. 350 crore.
Resignation of Key Personnel: The company’s Chief Financial Officer, Ankit Jain, resigned in March 2025, citing personal reasons and a desire to explore other career opportunities. This departure added to investor concerns about the company’s stability.
Leadership Turmoil at BluSmart: Gensol’s close association with BluSmart Mobility, a company undergoing significant restructuring, has also contributed to the negative sentiment. High-profile exits of key executives, including the CEO and other senior leaders, have raised alarms among investors about the stability and future direction of BluSmart, which is integral to Gensol’s operations.
Controversial Leasing Deal: Gensol is involved in a contentious leasing arrangement where it plans to sell nearly 2,997 EVs to Refex Green Mobility, which will then lease them back to BluSmart. This deal, valued at Rs. 315 crore, has yet to receive regulatory approval and has added to investor concerns regarding Gensol’s operational strategy and financial health.
Promoter Stake Sale: The company’s CEO, Anmol Singh Jaggi, had sold around 2.15 lakh equity shares at a share price of Rs. 533.1 per share, amounting to Rs. 11.46 crore through an Open Market transaction.
Earlier, the Promoter Group, including Anmol Singh Jaggi (Chairman and Managing Director), Gensol Ventures, and Puneet Singh Jaggi, pledged shares from December 2024. By the end of December 2024, around 81.7 percent of the promoters’ shares were pledged, up from 42.78 percent at the end of December 2023.
What is currently happening with Gensol?
Following all the events listed above, a new chapter has now unfolded as the Securities and Exchange Board of India (SEBI) has barred the company’s promoters — Anmol Singh Jaggi and Puneet Singh Jaggi — from accessing the securities market.
Reason for the SEBI Ban
SEBI launched an investigation into Gensol Engineering after credit rating agencies CARE and ICRA downgraded the company’s ratings to ‘D’ in March 2025 due to delays in debt servicing, raising concerns about its financial health.
The probe revealed that Gensol had submitted falsified conduct letters and debt servicing confirmations to mislead credit agencies and investors. SEBI also found that the company had defaulted multiple times on loans from public sector lenders IREDA and PFC, dating back to December 2024, but failed to disclose these defaults as required.
Additionally, Gensol borrowed nearly Rs. 978 crore between FY22 and FY24 to procure 6,400 electric vehicles (EVs), but only 4,704 EVs were purchased, leaving a discrepancy of over Rs. 207 crore that remains unaccounted for.
Misuse of Funds
SEBI’s investigation uncovered significant misuse of funds meant for EV procurement by Gensol. A large portion of these funds was transferred to Go-Auto, a company linked to Gensol, which in turn diverted the money to promoter-related entities such as Capbridge Ventures LLP, Matrix Gas, and Gensol Ventures, raising serious concerns about fund misappropriation.
Funds traced from Go-Auto were also used for luxury real estate purchases, including a property at DLF’s The Camellias in Gurgaon. Notably, ₹50 crore was routed from Go-Auto to Capbridge Ventures to pay for an apartment originally booked in the name of Jasminder Kaur, Anmol Singh Jaggi’s mother, which was later re-registered under Capbridge. SEBI further found that the booking amount for this apartment was sourced from Gensol’s funds, further highlighting the misuse.
SEBI’s Actions and Consequences
Following its investigation, SEBI has barred Gensol promoters Anmol Singh Jaggi and Puneet Singh Jaggi from acting as directors or key managerial personnel (KMPs) and restricted them from dealing in securities. SEBI also ordered Gensol to halt its proposed 1:10 stock split, citing risks to retail investors due to the company’s financial issues.
Additionally, a forensic audit has been ordered to scrutinize Gensol’s financial records and related-party transactions. These actions have severely impacted Gensol’s reputation and financial standing, resulting in major regulatory and legal consequences for the company and its promoters.
Written by Sridhar J
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