Gensol Engineering shares crash 90% from high as fraud concerns, SEBI actions weigh
Beleaguered solar EPC player Gensol Engineering Ltd.'s shares extended their losing streak in trade on April 17, crashing another five percent on the bourses.
The losses come after the market regulator Securities and Exchange Board of India (SEBI) passed an interim order against the firm and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, over alleged fund diversion.
The regulator has prohibited the promoters from taking up any directorial or key managerial roles and restricted them from trading in securities. Further, the Jaggi brothers have been barred from accessing the market.
The SEBI order noted, “What has been witnessed in the present matter is a complete breakdown of internal controls and corporate governance norms in Gensol, a listed company. The promoters were running a listed public company as if it were a propriety firm. The company’s funds were routed to related parties and used for unconnected expenses, as if the company’s funds were promoters’ piggybank”.
At 12.10 pm, shares of the firm were quoting Rs 116.54 apiece on the NSE, down five percent, crashing 90 percent from its 52-week high.
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Gensol took term loans worth Rs 978 crore from IREDA and PFC between 2021 and 2024, with Rs 664 crore taken for purchasing 6,400 EVs set to be leased to BluSmart. Additionally, Gensol was set to provide an additional equity (margin) contribution of 20 percent, bringing the total expected deployment of approximately Rs 830 crore for the purchase of the EVs.
In an exchange filing released in February 2025, the company said it has procured only 4,704 EVs so far. Its EV supplier, Go-Auto, also confirmed that Gensol has bought 4,704 EVs for a total consideration of Rs 568 crore. SEBI noted that the differential amount of Rs 262.13 crore between total expected deployment of approximately Rs 830 crore and the actual EV consideration of Rs 568 crore still remain unaccounted for, although over a year has passed since the company availed the last tranche of the financing.
In an interim order, SEBI Whole Time Member Ashwani Bhatia also directed GEL to put stock split on hold. On Saturday, company had announced stock split in the 1:10 ratio.
As per the SEBI order, the promoter holding in the GEL has already come down substantially and there is a risk of the promoters further off-loading the shares on gullible investors. Thus, investors need to be made aware of the alleged wrong doings detailed above through regulatory action.
At the same time, allowing promoters to remain at the helm of affairs as directors or Key Managerial Person in the company is likely to do further damage to the interests of the Company. SEBI also suspects that recently announced stock split of shares by GEL in the ratio of 1:10, was likely to attract more retail investors to the scrip.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.