Gensol's downfall: A case of diverting funds, defaulting on loans, and buying golf sets

In June last year, Gensol Engineering, which offers solar consulting services, was riding high. Its shares were trading at a peak of Rs 1,126 apiece, and its market cap had grown to Rs 4,300 crore after securing major engineering, procurement, and construction contracts for solar projects, as well as launching new electric vehicles. In the same month, market regulator Securities and Exchange Board of India (SEBI) first received a complaint alleging the company was manipulating share price and diverting funds towards the personal expenses of promoters. 

Cut to now, the company’s share price touched Rs 123.65 per share as of April 16. 

An interim order issued by SEBI on April 15 opened a can of worms and revealed how Gensol grossly misutilised funds obtained as loans and diverted a portion to promoters and promoter-related entities. The investigation disclosed that funds were diverted to related parties and promoters, including EV ride-hailing startup BluSmart’s co-founders Anmol Singh Jaggi and Puneet Singh Jaggi, who used them for personal expenses, including buying real estate and a golf set worth Rs 26 lakh, among others. 

The order restrained Anmol and Puneet from holding a managerial position at Gensol until further orders and put on hold the company’s recent stock split announcement due to the risk of an increased investor interest. 

Amidst ongoing troubles at Gensol, BluSmart has halted its ride-hailing operations in certain regions of Bengaluru and Delhi-NCR. The startup has already begun transitioning thousands of its electric vehicles onto rival Uber’s platform, a source told YourStory, in a pivot to becoming a fleet partner. 

Also Read

Refex Green Mobility drops plans with Gensol to take over BluSmart cabs

Here is a timeline of events—from Gensol receiving loans to SEBI coming across a web of transactions that led to it finding an unaccounted sum of Rs 262.13 crore. 

September 2022: Gensol received a loan of Rs 71.39 crore from the Indian Renewable Energy Development Agency (IREDA) credited to “GEL Trust and Retention Account IREDA Limited”. The company confirmed the receipt of the loan in its FY23 statement. On the same day, Gensol transferred Rs 26.06 crore from another internal account into the Trust and Retention Account, bringing the total amount to Rs 97.46 crore. 

October 2022: On October 3, 2022, Rs 93.88 crore was transferred to the bank account of its EV supplier entity, Go-Auto, which also leased out the vehicles to BluSmart. Go-Auto then transferred Rs 50 crore to Capbridge, a related party. Anmol and Puneet are designated partners of Capbridge. 

On October 6, Capbridge transferred Rs 42.94 crore to real estate company DLF for the purchase of an apartment in its project, The Camellias. A token amount of Rs 5 crore was wired to DLF on September 29 by Jasminder Kaur, mother of Jaggi brothers. 

February 2023: Gensol received Rs 43.68 crore as loans from IREDA, and the company transferred Rs 13.13 crore to the Trust and Retention account, resulting in total funds of Rs 56.82 crore. On the same day, Rs 54.62 crore was transferred to Go-Auto, which further transferred Rs 40 crore to Wellray Solar Industries—a company owned by Gensol Ventures and Puneet Singh until March 2020. Currently, a former employee of Gensol, Lalit Solanki, is the majority shareholder. 

On the same day, Wellray made transactions totalling Rs 39.50 crore to Matrix Gas and Renewables, where Anmol Singh is a promoter director and Puneet Singh is an ex-director, as well as Prescinto Technologies, a related party of Gensol, which SEBI notes is “under significant influence by key managerial personnel or their relative”.

Notably, Wellray transferred Rs 50 lakh to a stockbroker deployed to trade in the scrip of Gensol, representing a fractional share of stock. 

September 2023: Gensol gets a loan worth Rs 117.47 crore from Power Finance Corporation (PFC). The company supplements it with Rs 29.37 crore transferred from another internal account. 

Gensol then transfers the majority of these funds to Go-Auto, which then divides and sends money to both Capbridge and Gensol Consultant, where Anmol and Puneet Singh are promoter directors. 

The company was supposed to spend Rs 829.86 crore to buy EVs. In reality, it transferred Rs 775 crore to Go-Auto, for which it obtained delivery of 4,704 EVs costing Rs 567.73 crore.

June 2024: Market watchdog SEBI received a complaint alleging manipulation of share price and diversion of funds at Gensol Engineering, prompting an investigation into the matter

December 2024: Though unknown at the time, Gensol had first defaulted on servicing its loans. It was quick to submit no default statements for December 2024, January 2025, and February 2025 to credit rating agencies. 

January 2025: Gensol informs public bourses that it received pre-orders for 30,000 of its newly launched EVs at Bharat Mobility Global Expo 2025. When examined further, SEBI notes that the orders were MoUs for 29,000 cars. 

March 2025: On March 24, Ajay Agarwal, Managing Director of Go-Auto, said that an amount of Rs 50 crore was due from Gensol. On this matter, Gensol, on April 5, said that Go-Auto owed the company Rs 21.25 crore. 

Credit rating agencies, CARE Rating and ICRA Limited, downgrade ratings assigned to Gensol’s fund-based and non-fund-based credit facilities after agencies initiated a review of Gensol amidst reports of its largest EV customer, BluSmart, defaulting on Rs 30 crore worth of bonds in February. 

ICRA notes that the no default statements shared by Gensol were apparently falsified and that it raised concerns on its corporate governance, including its liquidity positions. 

Gensol provides statements from lenders regarding its debt servicing history, except for loans taken from IREDA and PFC. In the case of these two lenders, the firm shares conduct letters stating that the firm has been regular in its debt servicing. 

Agencies enquire with IREDA and PFC, and the lenders deny having issued such letters, indicating that Gensol fabricated these letters. 

Meanwhile, SEBI’s investigation points out a series of suspicious fund transfers dating back to 2022, stemming from the loans Gensol took from IREDA and PFC.