Spot the red flags: Vijay Kedia’s 10-point checklist to avoid Gensol-like stock scams

As Gensol Engineering faces a SEBI investigation for alleged share price manipulation and fund diversion, veteran investor Vijay Kedia has issued a strong caution to investors — warning that more such companies could be lurking in plain sight.

Kedia’s warning comes after SEBI barred Gensol Engineering and its promoters Anmol Singh Jaggi and Puneet Singh Jaggi from the securities market. The regulator also halted the company’s proposed stock split amid governance concerns.

In a post aimed at safeguarding retail investors, Kedia said, “There are many ‘Gensol’ still hiding in the cupboard—waiting to tumble out with time. Let’s hope it’s not too late by then.”

To help investors stay vigilant, he shared 10 red flags that may signal a potential scam:

1. Talk big and overpromise
2. Maintain constant media presence — through news coverage, hyperactive social media posts, and endless interviews
3. Magnify even the smallest developments
4. Raise funds frequently without clarity on deployment
5. Diversify into unrelated businesses just to ride trending narratives
6. Overuse flashy buzzwords to sound innovative without real substance (e.g., “AI-powered,” “next-gen,” “disruptive”etc )
7. Flaunt lavish promoter lifestyles that don’t match company performance
8. Have high levels of promoter pledging
9. Face frequent exits of key personnel (CFOs, auditors, CXOs)
10. Engage in excessive related-party transactions

Kedia concluded by saying, “There may be more red flags beyond this list. Stay curious. Stay cautious.”

Following SEBI’s action, Gensol shares fell nearly 5% on both BSE and NSE, closing at Rs 117.50 and Rs 116.54, respectively.

Sebi probe

SEBI began probing Gensol in June 2024 after receiving a complaint about fund diversion and share manipulation. The ongoing investigation has already cast a shadow on the company’s credibility, underscoring Kedia’s broader point: Due diligence isn’t optional — it’s essential.

Sebi issued an interim order against Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, citing serious allegations of financial mismanagement and fund diversion. The regulator has barred the Jaggi brothers from acting as directors or key managerial personnel and prohibited Gensol and associated entities from trading in the securities market until further notice.

In its order, SEBI said the promoters were treating the listed company like a “personal piggy bank”, routing large sums through related entities and spending company funds for personal luxury and real estate acquisitions.

Gensol and BluSmart

The impact of the order has rippled beyond Gensol. BluSmart, the EV-based cab-hailing company co-founded by Anmol Jaggi, has suspended its operations in major cities including Delhi, Mumbai, and Bengaluru. BluSmart abruptly stopped accepting bookings shortly after the SEBI action and the resignation of both Jaggi brothers from their respective roles.

According to The Economic Times, BluSmart’s shareholders have approved a plan to transition its fleet to rival Uber over the coming weeks, effectively exiting its core ride-hailing business and pivoting to functioning as a fleet partner.

What is BluSmart?

Founded in 2018 by Anmol Jaggi and Punit Goyal, BluSmart emerged as India’s first all-electric cab service. Initially known as Gensol Mobility, it rebranded to BluSmart in 2019. With over 8,500 electric vehicles and 5,800 charging stations, BluSmart was positioned as a sustainable alternative to traditional cab aggregators and had completed more than 1.45 crore rides by early 2025. It even expanded internationally with a premium EV limousine service in the UAE.

The fund diversion trail

Between 2021 and 2024, Gensol borrowed Rs 978 crore from public sector lenders including IREDA and PFC, ostensibly to finance the procurement of 6,400 electric vehicles for leasing to BluSmart. However, only 4,704 EVs were actually procured. SEBI found that despite a total expected outlay of Rs 829.86 crore, Rs 262.13 crore remains unaccounted for.

The regulator’s investigation uncovered a trail of misused funds:

Rs 42.94 crore used to purchase a luxury apartment in DLF’s Camellias project in Gurugram

Rs 26 lakh spent on a luxury golf set

Lavish personal travel, high-value credit card payments, and transfers to family members

Some of the fund transfers included:

Rs 6.20 crore to Anmol Jaggi’s mother, Jasminder Kaur

Rs 2.98 crore to his wife, Mugdha Kaur Jaggi

Rs 1.13 crore to Puneet Jaggi’s wife, Shalmali Kaur Jaggi

Rs 87.52 lakh to their mother

SEBI’s findings indicate a systematic misuse of public funds under the guise of corporate activity, resulting in severe erosion of trust and value for shareholders.

Adding to the company’s woes, ICRA and CARE Ratings downgraded Gensol’s credit rating to junk in March 2025 following delays in debt servicing. The fallout from this case is likely to deepen in the coming weeks as investigations continue.