IREDA To Recover INR 729 Cr From Gensol

SUMMARY

Last week, IREDA filed an insolvency petition against troubled Gensol Engineering

The company is accused of borrowing INR 977.75 Cr from IREDA and PFC for purchasing EVs but not utilising the entire amount for it

In April, SEBI, in an interim order, said Gensol’s promoters Anmol Singh Jaggi and Puneet Singh Jaggi used the company’s funds as their “piggybank”

After filing an insolvency plea against Gensol Engineering, the Indian Renewable Energy Development Agency (IREDA) has now approached the Delhi debt recovery tribunal (DRT) to recover about INR 729 Cr from the troubled company.

“… this is to inform you that the company has filed an Original Application under Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 before Hon’ble Debt Recovery Tribunal Delhi on 20.05.2025 for a default amount of INR 510 Cr and Rs. 218.95 Cr against M/s Gensol Engineering Limited and M/s Gensol EV Lease Pvt Limited respectively,” IREDA said in an exchange filing.

Banks and financial institutions can approach the DRTs for recovery of secured debt from borrowers.

Meanwhile, a Moneycontrol report, citing senior government officials, said that Power Finance Corporation (PFC) is also exploring recovery through the DRT route.

This comes over a month after the Securities and Exchange Board of India (SEBI), in an interim order, said Gensol’s promoters Anmol Singh Jaggi and Puneet Singh Jaggi used the company’s funds as their “piggybank”.

Gensol borrowed a total of INR 977.75 Cr from IREDA and PFC between FY22 and FY24. The company was to use INR 663.89 Cr for purchasing 6,400 EVs to be leased to BluSmart. However, only 4,704 vehicles were acquired, leaving INR 262.13 Cr unaccounted for, as per SEBI order.

How The Crisis At Gensol Is Unfolding

In its interim order, the markets watchdog said that the promoters misled shareholders and rating agencies, forged documents, and manipulated the company’s stock price. SEBI also barred the Jaggi siblings from holding any board positions or participating in the securities market.

All of these also hit EV ride-hailing startup BluSmart, a related entity of Gensol. The Jaggi brothers are also the cofounders of the startup. Following the SEBI order, BluSmart suspended its operations, leaving thousands of drivers and 800 full-time employees in the lurch.

Right after that, the Enforcement Directorate (ED) conducted raids at several premises linked to Gensol as well as the residence of Jaggi brothers in late-April. Puneet was also detained during the searches.

However, a week later, he received interim protection as Delhi High Court (HC) granted him an anticipatory bail and directed the Delhi Police to serve a seven day notice to him before arresting.

Amid the rumblings, the Jaggi duo, earlier this month, tendered their resignations and stepped down from the company.

Meanwhile, the Delhi HC, in back-to-back directions in recent weeks, has restrained BluSmart and Gensol from alienating or creating third-party rights over their leased vehicles.