Disaster-ridden EPC firm Gensol Engineering’s share worth continued to plummet on Thursday, ending the day’s commerce 4.97 per cent decrease at Rs 117.50 apiece. The corporate’s shares have been positioned beneath Enhanced Surveillance Mechanism (ESM) Stage 1 by inventory exchanges. This entails strict enforcement of a 5 per cent worth band with trade-for-trade settlement. Which means that all trades should be settled on the identical day. On the time of writing, Gensol’s market cap stood at Rs 446.3 crore, as its share worth touched a 52-week low.
In response to market regulator SEBI, brothers Anmol and Puneet Singh Jaggi, promoters of Gensol Engineering and EV cab service BluSmart, diverted Rs 262 crore—loaned by government-owned lending companies to acquire 1,700 electrical vehicles—in the direction of private indulgences and related-party entities.
Gensol Engineering’s share worth was down 5 per cent on Thursday to Rs 116.54 apiece on the NSE. Prior to now 5 days, the corporate’s inventory misplaced 16.55 per cent worth. In response to change knowledge, Gensol’s share worth declined 50.76 per cent previously month, 85.98 per cent previously six months, and 87.09 per cent previously 12 months.
Gensol is an organization within the renewables sector which was based in 2007. It was listed on the inventory exchanges in 2019. It began as an operator within the engineering, procurement, and development house with a concentrate on photo voltaic vitality initiatives.
Together with the Gensol inventory worth crash, BluSmart additionally suspended operations on Thursday amid the brewing disaster, with customers failing to guide cabs on BluSmart app. The Delhi airport additionally issued an advisory, cautioning flyers that BluSmart has quickly suspended operations, and asking them to avail different cab and transportation companies to and from the airport. Operational in Delhi-NCR, Mumbai, and Bengaluru, the EV cab service was significantly well-liked for airport drop-offs and pick-ups.
The disaster at Gensol
SEBI has barred the Jaggi brothers from the securities market over alleged monetary mismanagement and misuse of funds. In response to the regulator, the brothers diverted substantial mortgage quantities via complicated transactions for private use, together with the acquisition of luxurious actual property, and repeatedly misled buyers.
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SEBI has barred the 2 from the securities marketplace for monetary mismanagement and misuse of funds. The investigation into the brothers’ huge community of transactions routed via related-party entities and round-tripping started following a criticism of inventory manipulation and fund diversion in June 2024.
Following the regulator’s motion, the corporate introduced the resignation of an impartial director—Arun Menon—and its promoters.
In an electronic mail addressed to Anmol Singh Jaggi, Menon said that he had supplied to resign earlier however was requested to remain on till the IPO of Matrix Gasoline and Renewables, one other unit of the Gensol group.
Menon stated he had supplied to resign since he felt he was including “restricted worth to the corporate” after a number of requests for a face-to-face assembly with the CFO weren’t heeded. These conferences had been hunted for readability on Gensol’s debt place, Menon stated, including that he had additionally supplied to help the corporate with deleveraging via a debt restructuring plan.
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“There was rising concern on the leveraging of GEL (Gensol Engineering) steadiness sheet to fund the capex of different enterprise’s; and the sustainability of servicing such excessive debt prices by GEL,” Menon stated within the electronic mail, connected within the change submitting.
He additionally cited the phrases of his present employment, the place the guardian firm is a non-public fairness agency, stating that it doesn’t permit him to carry an impartial director’s function, as a cause for his resolution to give up the board instantly.
Gensol clarified that there’s “no different undisclosed price-sensitive data other than that flagged by SEBI identified to the Firm that might clarify the latest motion within the Firm’s share worth.”
The corporate denied media experiences that it was in discussions for an undisclosed “merger, acquisition, asset sale or some other important transaction.”
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SEBI’s findings
In what’s reportedly one of many greatest reported frauds at a startup in India, SEBI’s findings present that Rs 262 crore out of a mortgage secured from authorities companies for buying 1,700 EVs, the brothers bought a luxurious condominium in The Camellias, a high-end residential society operated by the DLF Group in Gurugram, Haryana.
A sum of Rs 40 crore was routed to Gensol Group’s associated social gathering entity Wellray Photo voltaic Options through GoAuto, in line with the SEBI order.
A sum of Rs 39 crore was transferred to the Jaggi brothers via one other sequence of complicated transactions.
Anmol Jaggi directed Rs 50 lakh from the Rs 26 crore obtained through Wellray into former BharatPe founder Ashneer Grover’s newest enterprise Third Unicorn.
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He additionally infused Rs 1.35 crore into lithium battery recycling agency BatX Energies.
Anmol Jaggi additionally reportedly spent cash on luxuries similar to a golf set from TaylorMade, other than remitting cash to his spouse and mom.
Amid these and different discrepancies discovered by SEBI, the markets regulator ordered the Jaggi brothers to chorus from collaborating within the securities market. Anmol and Puneet Jaggi are not collaborating within the administration of Gensol in compliance with SEBI’s interim order, the corporate stated in an change submitting.
What investor Vijay Kedia stated on Gensol episode
Investor Vijay Kedia took to social media platform X to state that “there are numerous Gensols nonetheless hiding within the cabinet.” In his social media put up, Kedia identified 10 pink flags that scream earlier than a rip-off.
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Kedia cautioned towards the overuse of flashy buzzwords similar to “AI-powered” and “next-gen” whereas additionally stating that they usually are inclined to diversify into “unrelated companies simply to journey trending narratives.”
He cautioned towards promoters exhibiting a life-style that doesn’t align with their firm’s efficiency. One other pink flag raised by Kedia was that of extreme related-party transactions carried out by listed corporations.
What’s the seemingly plan for BluSmart?
Gensol Engineering’s board is contemplating plans to fold up BluSmart and revert to being a fleet operator for US-based cab aggregator Uber in India, the Financial Instances had reported, citing individuals conversant in the matter. Gensol’s shareholders have reportedly accepted the transition plan which is anticipated to start out with 700-800 cabs. At its peak, BluSmart clocked 25,000-30,000 rides per day. This determine declined to half in latest weeks, in line with the report.