Gensol Engineering share price is trading at ₹123.65, down 5% from the previous close of ₹130.15. The stock opened at ₹123.65, which is also the day’s low and high, hitting its 5% lower circuit limit on the NSE.
Overview of Contents
SEBI Bars Promoters Over Financial Mismanagement
SEBI has barred Gensol Engineering’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market. The regulator accused them of financial mismanagement and diversion of company funds.
In its order, SEBI said that Gensol showed a complete breakdown of internal controls and corporate governance norms. The company was being run “like a proprietary firm,” ignoring the responsibilities of a listed public company.
Funds Diverted to Real Estate Instead of EVs
Gensol had raised ₹975 crore in loans from institutions like IREDA and PFC for purchasing electric vehicles (EVs). However, only a part of the money was used for that purpose.
SEBI’s investigation revealed that the funds were diverted to related parties and used for unconnected personal expenses, including luxury real estate purchases. The regulator said the promoters treated the company’s funds like a “piggybank”.
This sharp fall came after a strong action by the Securities and Exchange Board of India (SEBI) against the company’s promoters.
Forged Documents Submitted to Credit Agencies
Another serious finding by SEBI was that Gensol submitted forged documents to credit rating agencies to falsely claim that debt repayments were made on time. This raises major concerns about the credibility of the company’s financial reporting.
SEBI Warns Investors of High Risk
Due to these findings, SEBI has cautioned investors about high risks associated with Gensol Engineering shares. The stock has already been extremely volatile and has lost nearly 83% of its value in 2024 alone. On Tuesday, it had fallen by 3% to ₹129 despite a strong broader market.
About Gensol Engineering
Gensol Engineering is involved in EPC (Engineering, Procurement, and Construction) services for solar energy projects. It also provides consulting services and has recently expanded into electric vehicle leasing as part of its clean mobility push.
Despite the controversy, the company’s financials have shown impressive growth in recent years:
- Revenue: ₹61 crore in FY17 → ₹1,152 crore in FY24
- Operating Profit: ₹2 crore → ₹209 crore
- Net Profit: ₹2 crore → ₹80 crore
However, SEBI noted that the promoter shareholding dropped significantly from 70.72% in FY20 to 35% in FY25, which raised red flags about the promoters’ intent.
Conclusion
The SEBI order has raised serious questions about Gensol Engineering’s governance, financial discipline, and promoter integrity. While the company had shown strong financial performance, the alleged misuse of funds and forged documents could lead to long-term damage to investor trust.
Investors are advised to stay cautious and track further updates from the regulator and the company before making any decisions.