The Gensol Engineering Scandal and What It Teaches Us About Investing
In a world eager to ride the green energy wave, Gensol Engineering looked like a poster child for India’s clean energy future. It ticked all the right boxes—solar power, electric vehicles, rapid revenue growth, and a compelling startup story. But behind the glimmering facade of innovation and sustainability, something murky was brewing. What began as a promising success story turned into one of the most shocking corporate fraud cases in recent memory. The company’s stock, which once traded at a high of ₹2,392, plummeted dramatically to ₹122, a staggering 93% drop that has left nearly one lakh investors grappling with massive losses.
As investment advisors, we often say: Look beyond the numbers. And the Gensol case is a textbook example of why.
Founded with the goal of revolutionizing renewable energy in India, Gensol Engineering made its mark by offering solar consulting services and undertaking EPC (Engineering, Procurement, and Construction) projects in the green energy space. Over time, it expanded into the electric vehicle domain, leasing EVs and even announcing plans to manufacture its own vehicles. The company was also the force behind many of the vehicles run by the cab service BluSmart, co-founded by the same promoters.
From 2017 to 2024, the company’s revenue surged from ₹61 crore to over ₹1,100 crore. For investors, this was nothing short of a dream. The stock price soared to ₹1,126, and the shareholder base ballooned from just 155 at the time of listing in 2019 to nearly 110,000 by early 2025. On paper, it looked like Gensol couldn’t do more right.
But in the background, the company’s promoters—Anmol Singh Jaggi and his brother Puneet Singh Jaggi—were quietly offloading their stake. Their holding dropped from over 70% to just around 35%, even as retail investors kept piling in. The real shock came in March 2025 when credit rating agencies ICRA and CARE downgraded Gensol’s rating to “D”—the default category.
What turned heads wasn’t just the downgrade. One of the most alarming discoveries was the submission of forged No Objection Certificates (NOCs) from financial institutions like IREDA and PFC to the stock exchanges—documents which, SEBI confirmed, were never actually issued. That’s not something credit agencies say lightly. It was a big allegation to hurl. They were essentially saying, "We think this company is faking documents to hide the fact that they weren't paying their loans on time." If ICRA was right, the company was playing fast and loose with ethical and legal norms. It signalled a deeper, more troubling issue at play—one involving potential deception.
Gensol responded with a statement claiming this was merely a "liquidity mismatch" and denied any wrongdoing. But the market didn’t buy it. The stock nosedived, losing nearly half its value in just a few weeks.
SEBI had already begun looking into Gensol after receiving complaints in mid-2024 about suspected fund diversion and stock price manipulation. But after the downgrade, the investigation gathered pace, and what SEBI found was staggering.
According to SEBI’s interim order, Gensol had taken loans worth around ₹978 crore from two government-backed financial institutions—IREDA and PFC. These loans were earmarked for purchasing 6,400 electric vehicles to lease to BluSmart. However, Gensol only ended up buying 4,700 EVs. That’s a shortfall of 1,700 vehicles. So, where did the remaining money go?
Turns out, a significant portion was siphoned off.
One instance stood out for how blatantly the funds were misused. Gensol borrowed ₹71.41 crore from IREDA in September 2022, which was supposed to go towards EV purchases. On the same day, the Company transferred promoter contribution of Rs. 26.06 Crore from another internal account into the above. Just three days later, ₹93.88 crore was transferred to Go-Auto, their EV supplier. But instead of delivering EVs, Go-Auto redirected ₹50 crore to a firm called Capbridge Ventures LLP, controlled by the Jaggi brothers themselves.
Soon after, Capbridge used ₹42.94 crore to buy a luxury apartment in DLF’s ultra-premium project, The Camellias in Gurgaon. The initial booking amount of ₹5 crore had been paid earlier by the Jaggis’ mother, money that also came from Gensol. When the apartment booking was cancelled, DLF refunded the amount, not to Gensol, but to yet another entity linked to the family.
This was not a one-time event. SEBI discovered a series of such fund movements involving shell companies and related entities, where loan money meant for business expansion ended up in luxury purchases and stock trading accounts. It didn’t stop at real estate. SEBI's investigation revealed that company funds were spent on luxury items and personal indulgences.
Over ₹26 lakh was spent on a golf set, ₹17 lakh on shopping from premium brands like Titan, several lakhs on spa treatments, and lakhs more on personal travel bookings through platforms like MakeMyTrip.
In another instance, money flowed through multiple entities before landing in a stock brokerage account, used to trade in Gensol’s own shares. The sheer audacity and scale of the misappropriation left investors stunned.
Gensol didn’t just misuse funds—they also misled investors. In January 2025, the company claimed it had received pre-orders for 30,000 electric vehicles. SEBI found these were merely non-binding MoUs without pricing, terms, or timelines. And when NSE officials visited Gensol’s touted EV plant in Pune, they found no manufacturing activity—just two or three workers on site and minimal electricity usage, suggesting the plant was more of a facade than a factory.
This kind of deception isn’t just unethical—it’s dangerous. It breaks investor trust and casts a shadow on the entire renewable sector, which India is counting on for its future energy needs.
SEBI has issued several interim directions while it continues its investigation. Anmol Singh Jaggi and Puneet Singh Jaggi are barred from holding any director or key managerial position in Gensol. The company and its promoters are also prohibited from buying, selling, or dealing in securities. A forensic audit has been ordered, and more action will likely follow based on the auditor's findings. Meanwhile, Gensol’s credibility lies in tatters, and thousands of retail investors are left grappling with heavy losses.
The Gensol episode is a stark reminder that flashy growth numbers and hot sectors don’t always mean a company is on solid ground. At Moneyvesta, we’ve always emphasized the importance of looking beyond financial statements. We don’t just chase revenue growth—we examine how that growth is achieved. We look at multiple factors, which includes company management, future growth, business models, and corporate governance.
Had investors paused to ask how Gensol was growing so fast, or why its promoters were steadily reducing their stake, they might have spotted the red flags. But in a bull market, it's easy to get caught up in the narrative. That’s why our job is not just to invest in good numbers, but in good businesses backed by trustworthy management and solid fundamentals.
Because in the end, it’s not just about chasing returns—it’s about protecting wealth.
