Sebi bars Gensol Engineering, its promoters from accessing markets in fund diversion case

Capital markets regulator SEBI on Tuesday issued an interim order barring Gensol Engineering Ltd (GEL) and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities markets until further notice. The action was taken in connection with alleged fund diversion and corporate governance lapses.

SEBI has also prohibited both Anmol and Puneet Singh Jaggi from serving as directors or key managerial personnel at Gensol during the period of the restriction. Additionally, the regulator directed the company to suspend its proposed stock split announced earlier.

The order follows a complaint received by SEBI in June 2024, alleging manipulation of GEL’s share price and diversion of company funds. This prompted the regulator to initiate a detailed probe into the matter.

In its 29-page interim order, SEBI stated, “The prima facie findings have shown mis-utilisation and diversion of funds of the company (GEL) in a fraudulent manner by its promoter directors, Anmol Singh Jaggi and Puneet Singh Jaggi, who are also the direct beneficiaries of the diverted funds.”

The investigation remains ongoing, and the current restrictions will stay in effect until SEBI issues a final order. 

The individuals identified as GEL, Anmol, and Puneet Singh Jaggi have been accused of breaching the regulations of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules, as stated. It was reported that the promoters were operating a publicly listed company as if it was a sole proprietorship entity. Funds belonging to GEL were transferred to affiliated parties and utilized for unrelated expenses, behaving as though the company's funds were used as personal assets by the promoters.

Consequently, these actions may necessitate writing off the diversions from Gensol's financial records at some point, leading to potential losses for the investors of the company.

Shares of Gensol Engineering Ltd plunged 5% on Tuesday, hitting a new 52-week low of ₹130.15, before closing 2.29% lower at the same price. So far in calendar year 2025, the stock has crashed 83.16%, reflecting deep investor concerns over the company’s financial and operational stability.

Amid the sell-off, both BSE and NSE have placed Gensol under the Enhanced Surveillance Measure (ESM) framework. This mechanism applies to mainboard-listed companies with market capitalisation below Rs 1,000 crore, intended to safeguard investors and maintain market integrity.

Adding to its woes, Gensol recently called off a planned asset deal involving the transfer of 2,997 electric vehicles (EVs) to Refex Green Mobility Ltd (RGML). These EVs are currently deployed on the BluSmart platform, operated by Gensol's parent entity.

The company's financial stress has been further underlined by credit rating downgrades. ICRA downgraded loan facilities worth ₹2,050 crore, while CARE Ratings marked bank facilities of Rs 716 crore with a ‘CARE D’ rating, signifying a default risk.

For context, a ‘D’ rating indicates that the company is either in default or likely to default on its financial obligations, intensifying investor apprehension around Gensol's creditworthiness.

(With agency inputs)