Ireda files insolvency plea against Gensol Engineering over ₹510 cr default

State-owned Indian Renewable Energy Development Agency (Ireda) has filed an application seeking insolvency proceedings against embattled Gensol Engineering over a default of ₹510 crore, an exchange filing by Ireda shows.

The Ireda's plea has been filed under Section 7 of the Insolvency and Bankruptcy Code (IBC). "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 Insolvency and Bankruptcy Code, 2016 against M/s Gensol Engineering Limited, for an amount of default of Rs. 510,00,52,672," the company said.

The state-run PSU also filed a complaint against Gensol, its promoters Anmol Singh Jaggi and Puneet Singh Jaggi, and associated companies for alleged falsification of documents and dilution of promoter holding without lender approval on April 24.

The latest development comes a day after the promoters of Gensol Engineering, Anmol Singh Jaggi and Puneet Singh Jaggi, resigned from the company following an interim order issued by the Securities and Exchange Board of India (Sebi) that barred both from holding key managerial positions at Gensol. In parallel, the Ministry of Corporate Affairs has also initiated a separate probe into the affairs of Gensol and its affiliate, BluSmart Mobility for alleged violations of the Companies Act.

Shares of Gensol Engineering closed 5% higher at ₹59.47 on the NSE today, though the scrip has plunged 53.95% in the past month alone.

Sebi's stringent action against Gensol

The market regulator had barred the Jaggi brothers from accessing the securities market and from holding any directorship or key managerial role in the company until further notice. Gensol’s appeal to the Securities Appellate Tribunal (SAT) failed to secure a stay on Sebi’s April 15 order. However, SAT directed the company to respond to Sebi’s show-cause notice within two weeks, with a confirmatory order expected in four weeks.

Sebi’s 29-page interim order outlined serious findings, including fund diversion and submission of forged documents. The promoters allegedly misused company funds for personal gain and treated the listed company as a private enterprise. The Sebi order also detailed how Gensol misled not only the regulator but also credit rating agencies, lenders, and investors by submitting falsified conduct letters supposedly issued by its lenders. Sebi found the company funds were routed to related entities and used for unrelated personal and business expenses, effectively turning Gensol’s accounts into a vehicle for private enrichment.

Between FY22 and FY24, Gensol secured loans amounting to ₹977.75 crore from Ireda and PFC, of which ₹663.89 crore was earmarked for acquiring 6,400 EVs. However, the company has acknowledged acquiring only 4,704 EVs worth ₹567.73 crore, leaving a discrepancy of ₹262.13 crore after accounting for its required equity contribution.