State-run Indian Renewable Energy Development Agency (IREDA) has initiated insolvency proceedings against Gensol Engineering Ltd over a loan default exceeding Rs510 crore, escalating the financial and regulatory troubles for the renewable energy company. Last month, Power Finance Corporation Ltd (PFC), another State-run company, lodged a formal complaint with the economic offences wing
(EOW) of the Delhi police against Gensol Engineering for submitting falsified documents to obtain loans and misusing funds allocated for the purchase of electric vehicles (EVs).
In a regulatory filing, IREDA confirmed it filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the national company law tribunal (NCLT) on 14 May 2025, citing a default amount of Rs510 crore. The move follows IREDA’s prior communication on 25 April 2025, signalling its intent to pursue recovery action against the company.
Gensol’s deepening crisis follows a damning interim order issued by the Securities and Exchange Board of India (SEBI) on 15 April 2025 which alleged large-scale fund diversion, fraudulent disclosures, and misuse of investor and lender money. SEBI accused Gensol of funnelling hundreds of crores through related parties, purchasing luxury assets including a high-end apartment, and forging 'no objection certificates' (NOC) and conduct letters submitted to credit rating agencies.
The regulator further noted that the company made exaggerated claims about its EV procurement programme, even as actual plant activity remained negligible. Based on these findings, SEBI barred Gensol and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi (the Jaggi brothers), from accessing the securities market and from holding directorship or key managerial positions in any listed company.
Gensol’s appeal for relief was turned down by the securities appellate tribunal (SAT) earlier this month, with the tribunal directing the company to file its reply and asking SEBI to pass a final order within four weeks of the hearing.
Meanwhile, legal troubles continue to mount. Multiple lessors have moved the Delhi High Court, seeking to protect their rights over EVs leased to Gensol’s subsidiary, BluSmart. On 9 May 2025, the court ordered the seizure and relocation of 129 electric passenger vehicles hypothecated to STCI Finance Ltd, after allegations surfaced that the companies had defaulted on a Rs15 crore loan and were attempting to unlawfully dispose of the vehicles.
Earlier, the court restrained Gensol and BluSmart from alienating or creating third-party rights over several more leased EVs: 220 vehicles tied to Smas Auto Leasing and Shefastaq OPC, 95 leased by Clime Finance Pvt Ltd and 175 leased by Japanese financial firm Orix.
With IREDA’s insolvency application now before the NCLT and a series of asset protection orders issued by the High Court, Gensol Engineering finds itself under intense scrutiny from both regulators and creditors. The company's next course of action will be closely watched by investors and stakeholders across the renewable energy and electric mobility sectors.
Earlier this week, the Jaggi brothers, the promoters of Gensol Engineering, stepped down from their positions in the company following SEBI's damning interim order accusing them of large-scale financial misconduct.
The resignations come less than a month after SEBI barred the Jaggi brothers and Gensol Engineering from accessing the securities markets, accusing them of orchestrating a 'brazen' scheme to divert company funds into personal ventures and shell entities. The regulator’s 29-page interim order alleges the promoters used Gensol as a personal piggy bank — redirecting funds meant for EV infrastructure and procurement into luxury real estate, family-controlled companies, and even stock manipulation operations.
SEBI has also prohibited the Jaggi brothers from serving as directors or key managerial personnel in any listed entity. A forensic audit of Gensol and its network of related companies is currently underway.
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