On May 14, 2025, IREDA announced that it had filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Gensol Engineering Ltd for defaulting on a loan worth ₹510 crore. The company had borrowed a total of ₹977.75 crore from IREDA and Power Finance Corporation (PFC) between FY22 and FY24, ostensibly for electric vehicle procurement and related renewable energy initiatives.
According to the loan agreement, ₹663.89 crore was sanctioned to purchase 6,400 electric vehicles (EVs) to be leased to BluSmart, an EV ride-hailing startup also promoted by Gensol’s founders. However, only 4,704 vehicles were purchased. A staggering ₹262.13 crore remains unaccounted for, as highlighted in a recent interim order by the Securities and Exchange Board of India (SEBI).
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SEBI Flags Diversion of Funds and Stock Price Manipulation
SEBI’s interim order paints a disturbing picture of financial misconduct. It found that Gensol’s promoters, brothers Anmol Singh Jaggi and Puneet Singh Jaggi, diverted company funds for personal use. This included lavish expenditures such as the purchase of a luxury apartment in DLF’s The Camellias, and investments in Third Unicorn, a startup founded by former BharatPe co-founder Ashneer Grover.
The market regulator also identified manipulation of Gensol’s share prices and improper financial disclosures. Of the total debt, SEBI observed defaults of ₹57.9 crore from IREDA and ₹13.67 crore from PFC, while noting that the financial mismanagement extended to family members of the promoters.
Adding further complexity, BluSmart, the entity dependent on Gensol’s EV acquisitions, suspended its operations, leaving over 10,000 drivers without work and 800 employees unpaid since March 2025. The startup’s viability has been directly impacted by the financial instability and reputational damage stemming from Gensol’s misdeeds.
ED Crackdown Deepens Trouble Amid Dubai Link and Betting Scam Angle
The Enforcement Directorate (ED) has also entered the fray. In April 2025, the agency raided multiple premises associated with Gensol and detained Puneet Singh Jaggi for alleged foreign exchange violations. While the Delhi High Court granted interim protection to Puneet, the ED’s probe has not ceased.
Investigations have reportedly revealed a nexus involving Dubai-based entities, suspected of using tainted funds from the Mahadev betting app scam to manipulate Gensol’s stock prices. In response, the ED froze over 5 lakh shares of Gensol, intensifying the scrutiny around the company.
Earlier this month, Gensol’s appeal to stay SEBI’s interim order was rejected by the Securities Appellate Tribunal (SAT), which emphasized the necessity of a comprehensive investigation.