IREDA Drags Gensol To Insolvency Court Over INR 510 Cr Default

SUMMARY

IREDA said it has initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code over a default of INR 510 Cr by Gensol

In an interim order last month, SEBI found that the EPC company defaulted on debt worth INR 57.9 Cr from IREDA and an additional INR 13.67 Cr in debt from PFC

Gensol borrowed INR 977.75 crore Cr from IREDA and Power Finance Corporation between FY22 and FY24, of which INR 262.13 Cr, as per SEBI, remains unaccounted for

The Indian Renewable Energy Development Agency (IREDA) has filed an insolvency petition against BluSmart’s related entity and troubled engineering, procurement and construction (EPC) company Gensol Engineering.

In a filing with the exchanges, IREDA said that it has initiated insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC) over a default of INR 510 Cr by Gensol.

“… This is to inform you that the Company (IREDA) has filed an application today i.e. May 14, 2025 under Section 7 of Insolvency and Bankruptcy Code, 2016 against M/s Gensol Engineering Limited,… for an amount of default of INR 510,00,52,672/-,” read the filing.

It is pertinent to note that Gensol borrowed INR 977.75 crore Cr from IREDA and Power Finance Corporation (PFC) between fiscal year 2021-22 (FY22) and FY24. Of this, proceeds to the tune of INR 663.89 Cr were supposed to go towards buying 6,400 EVs to be leased to the EPC company’s related entity and EV ride-hailing startup, BluSmart.

However, the company only purchased 4,704 vehicles against the sanctioned commitment of 6,400 EVs while taking the loan, and as much as INR 262.13 Cr remains unaccounted for, as per an interim order issued by Securities and Exchange Board of India (SEBI) last month.

Gensol’s Web Of Mess

In the interim order, SEBI said that Gensol and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, diverted company funds and were involved in manipulation of its share price. SEBI found that the EPC company defaulted on debt worth INR 57.9 Cr from IREDA and an additional INR 13.67 Cr in debt from PFC.

The market regulator also noted that company funds were diverted for personal use of promoters and their family members, including mother of Anmol Singh Jaggi and his wife. A part of the proceeds were also utilised to buy a luxury apartment in DLF’s “The Camellias” and invest in Ashneer Grover-led Third Unicorn.

The troubles at the company also have a direct bearing on BluSmart. The Jaggi brothers are also the cofounders of the EV ride-hailing startup.

Following the SEBI order, the startup suspended operations, leaving more than 10,000 drivers in the lurch. On the other hand, 800 full-time employees haven’t been paid salaries since March this year.

Meanwhile, the Enforcement Directorate (ED) raided multiple premises linked to Gensol last month and detained Puneet Singh Jaggi over alleged forex violation.

Later, Puneet received interim protection from the Delhi High Court (HC), which directed the Delhi Police to serve a seven-day notice to Puneet before his arrest.

Amid all these, the ED reportedly froze over 5 Lakh shares of Gensol over suspicions that a Dubai-based company allegedly manipulated its share price using “tainted funds” from the Mahadev betting app scam.

The Securities Appellate Tribunal (SAT), earlier this month, rejected Gensol’s appeal for a stay on the SEBI order and backed the need for a thorough investigation into the company.