Rs 1.5 lakh electricity bill, 2-3 labourers: How an NSE official discovered Gensol’s EV plant had ‘no manufacturing activity’

Before the Securities and Exchange Board of India (SEBI) barred Gensol Engineering founders, Anmol and Puneet Jaggi, from holding key roles in listed companies, it unearthed a series of discrepancies, some of which were connected to the disclosures made by the company. In an interim order, SEBI stated that it found discrepancies in Gensol’s disclosures related to pre-orders for 30,000 newly-launched EVs as well as a manufacturing plant in Pune. 

SEBI began investigation into the company and the founders after it received a complaint in June 2024, relating to share price manipulation and diversion of funds from the company. 

Gensol had made a disclosure on January 28, 2025 to the exchanges about the pre-orders for 30,000 units of its new-launched electric vehicles unveiled at the Bharat Mobility Global Expo 2025. Once the relevant documents were asked for, it turned out that what was declared as pre-orders of 30,000 were actually Memorandum of Understandings (MOUs) that the company had entered with nine entities for 29,000 cars. 

The MoUs were in the “nature of an expression of willingness”, with no details of price or delivery schedule. Prima facie, it appeared that the claims were then misleading.

In this regard, a representative of NSE visited the plant on April 9, who discovered the jarring discrepancy. The plant was located in Pune’s Chakan area. Upon reaching the plant the official discovered that there was no manufacturing activity at the plant with only two-three labourers present there.

The NSE official then called for details of electricity bill and found that the maximum amount billed by Mahavitaran (or Maharashtra State Electricity Distribution Company Limited) during the last 12 months was Rs 1,57,037 for the month of December 2024. “Hence, it can be inferred that there has been no manufacturing activity at the plant site which is on a leased property,” SEBI stated. 

Gensol had also informed the exchanges on January 16, 2025, that it announced a strategic tie-up with Refex for the transfer of 2,997 electric four-wheelers. Refex would assume Gensol’s existing loan facility amounting to Rs 315 crore. The takeover was withdrawn two months later.

In a February 25 disclosure, Gensol informed the exchanges that it had signed a non-binding term sheet for Rs 350 crore for a strategic transaction involving the sale of its US subsidiary Scorpius Trackers, which was incorporated on July 22, 2024. “When probed by SEBI regarding the basis of such valuation of Rs 350 crore, Gensol has failed to submit any explanation/rationale,” it said.

The discrepancies raise questions about whether investors, auditors, or analysts noticed any inconsistencies — and if they did, what actions followed.

For instance, credit rating agencies (CRAs) CARE Rating Limited (CARE) and ICRA Limited (ICRA), on March 03, 2025, and March 04, 2025, respectively, downgraded the ratings assigned for fund-based and non-fund based credit facilities availed by Gensol to ‘D’ over delays in servicing debt obligations. On March 5, Gensol issued a release, signed by Anol Singh Jaggi denied falsifying any debt serving claims.

Upon investigation the promoters were found by SEBI to have submitted fake documents to Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) to hide loan defaults.

The CRAs stated that when they sought term loan agreements, Gensol provided statements of all lenders except for IREDA and PFC. In those cases, Gensol shared ‘Conduct Letter’ purportedly issued by IREDA and PFC, stating that Gensol was regular in debt servicing. Once SEBI sought confirmation from IREDA and PFC on the Conduct Letters and NOCs, both the lenders categorically denied having issued such letters.

IREDA and PFC had given Rs 977.75 crore term loans to Gensol, out of which Rs 663.89 crore was for purchasing 6,400 EVs, which were subsequently leased to BluSmart. In a response on February 14, 2025, Gensol acknowledged that it procured 4,704 EVs as against 6,400. The figure was corroborated by Go-Auto Pvt Ltd that supplied the EVs. It acknowledged selling 4,704 EVs to Gensol for Rs 567.73 crore, which is less than what IREDA and PFC had given for EVs.

Gensol was to provide an additional equity (margin) contribution of 20 per cent, bringing the total expected deployment of Rs 829.86 crore for the purchase of 6,400 EVs. Based on this, the SEBI stated that Rs 262.13 crore (Rs 829.86 crore – Rs 567.73 crore) remained unaccounted for.