Gensol Engineering Share Price Declines for Eighth Straight Session Amid Regulatory Concerns

Market Activity

During Monday's session, the Gensol Engineering share price continued downward, reaching a new 52-week low. The stock opened at ₹111.65 per share on the BSE, marking its eighth consecutive lower circuit amid ongoing market concerns.

Regulatory Investigation and Key Findings

The recent drop in price comes after an interim directive was issued by the Securities and Exchange Board of India on April 15, 2025. The order was based on a complaint filed in June 2024, which raised allegations of irregular share price movements and misuse of company funds by the firm and its promoters.

SEBI reported that its probe uncovered serious discrepancies. A visit by a National Stock Exchange (NSE) official to Gensol Electric Vehicle Private Ltd's Chakan, Pune facility on April 9 revealed an absence of manufacturing operations. Only two to three workers were found on-site during the inspection, and no production activity was observed.

Electricity usage records from the facility further supported this observation. The highest electricity charge recorded in the past year was ₹1,57,037.01 in December 2024, indicating minimal power consumption and reinforcing the conclusion that the plant was largely inactive.

Corporate Disclosures and Financial Insights

In January 2025, the company informed stock exchanges that it had received pre-orders for 30,000 electric vehicles, which were displayed at the Bharat Mobility Global Expo 2025. However, the SEBI order clarified that these were non-binding Memorandums of Understanding (MoUs) signed with nine entities for 29,000 units. These MoUs lacked key commercial details such as pricing and delivery schedules.

Financial Overview

• Loans Sanctioned: ₹977.75 crore (from IREDA and PFC, FY22–FY24)
• Allocation for EV Acquisition: ₹663.89 crore
• Vehicles Procured: 4,704 units
• Procurement Value: ₹567.73 crore (as confirmed by Go-Auto, a supplier)
• Equity Contribution Requirement: 20%
• Total Required Investment: ₹829.86 crore
• Unaccounted Funds: ₹262.13 crore

SEBI's findings revealed that some funds intended for vehicle purchases were redirected to Gensol Engineering or entities linked to the promoters. The report also reported that some funds were used for personal purposes, including purchasing a luxury apartment, transferring funds to family members, and investing in privately held companies owned by the promoters.

Regulatory Actions and Corporate Changes

Following the discovery of these issues, SEBI issued several directives:

• Market Ban: The promoters, Anmol Singh Jaggi and Puneet Singh Jaggi were barred from participating in the securities market.
• Management Restrictions: Both individuals were prohibited from holding directorial or managerial roles in Gensol Engineering.
• Board Resignations: Following the interim order, the Jaggi brothers stepped down from the company's board.
• Corporate Action Suspended: SEBI also instructed Gensol to halt its proposed 1:10 stock split.

Summary

Gensol Engineering has come under regulatory scrutiny after an interim order by SEBI highlighted serious governance lapses, including questionable disclosures, fund diversion, and inactivity at its manufacturing plant. The investigation has triggered substantial corporate and regulatory actions, contributing to the company's share price decline.