Sebi bars Gensol Engineering promoters for alleged fund diversion

Regulator will appoint a forensic auditor to examine accounts

The Securities and Exchange Board of India (Sebi) on Tuesday debarred Anmol Singh Jaggi and Puneet Singh Jaggi, promoters and directors of Gensol Engineering, from the securities market, allegedly for diversion of funds and fraudulent practices. The Gensol case adds to the already long list of Indian startups across categories which have been found lacking in regulatory compliances.

 

In an interim order, the market regulator also restricted them from holding any key position at any listed company until further orders.

 

Sebi’s findings show that funds were used for purposes unrelated to the objective of the sanctioned term loans. These included personal expenses of the promoters, purchase of high-end real estate, and diversion to benefit private entities either owned by the promoters or their close relatives.

 

Nearly ₹262 crore of loans taken by the company remain unaccounted for, even though more than a year has passed since it availed of the last tranche of financing.

 

Sebi’s investigation was triggered by complaints and subsequent downgrades of Gensol's credit ratings by CARE Rating and Icra due to delays in servicing debt obligations by BluSmart Mobility, a related party of Gensol.

 

The regulator has also kept the company’s pending stock split on hold. It will appoint a forensic auditor to examine the accounts of Gensol and its related parties which will submit its report within six months of appointment.

 

“The promoters were running a listed public company as if it were a proprietary firm. The company’s funds were routed to related parties and used for unconnected expenses, as if the company’s funds were promoters’ piggybank,” noted Sebi whole-time member Ashwani Bhatia in the order.

 

Gensol Engineering, a company engaged in solar consulting services, engineering, procurement, and construction (EPC) services, and leasing of electric vehicles (EVs), has seen impressive growth over the past few years. 

 

The company was initially listed on the BSE SME Platform in October 2019 and subsequently moved to the main boards of the BSE and the National Stock Exchange in July 2023.

 

The company’s market capitalisation slipped from a high of ₹4,300 crore to ₹506 crore in April 2025.

 

While the number of shareholders in Gensol increased from 155 in FY20 to 110,000 as of March 2025, the promoter holding came down from 70.72 per cent to 35 per cent during the same period. Sebi has alleged that the company submitted forged documents to mislead the regulator, lenders, credit rating agencies, and investors.

 

When the rating agencies sought term-loan statements, Gensol provided conduct letters from Indian Renewable Energy Development Agency (Ireda) and Power Finance Corporation stating the company was regular in its debt servicing.

 

However, both lenders denied having issued any such letters and there were multiple defaults by the company.

 

Gensol had availed of ₹978 crore worth of term loan from Ireda and PFC. Of this, ₹664 crore was to purchase 6,400 EVs, which were to be subsequently leased to BluSmart. However, the company purchased only 4,700 EVs for ₹567 crore.