Setback For Gensol: NCLT Admits IREDA Insolvency Plea Over Rs 510 Cr Default
The NCLT Ahmedabad admitted IREDA's plea for insolvency against Gensol Engineering Ltd over Rs 510.10 crore loan default. SEBI barred Gensol's promoters for fund misuse.
In a setback for Gensol Engineering Limited, the National Company Law Tribunal (NCLT), Ahmedabad Bench has admitted a plea by Indian Renewable Energy Development Agency Ltd (IREDA) to initiate insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.
IREDA, a public sector NBFC under the Ministry of New and Renewable Energy, alleged that Gensol defaulted on loan repayments worth Rs 510.10 crore across five sanctioned financial facilities, including electric vehicle leasing and solar power projects. The loans were disbursed between March 2022 and May 2024.
According to the shared court order copy, the tribunal said that Gensol had failed to maintain financial discipline, citing defaults on 31 March, 19 April, and 12 May 2025.
IREDA in the filing said that it filed an application on May 14 under Section 7 of Insolvency and Bankruptcy code, 2016 against Gensol Engineering Limited for a defaulted amount of Rs 510,00,52,672.
IREDA admitted supporting evidence including ledger extracts, bank statements, and filings with NeSL (National E-Governance Services Ltd), as well as invoking personal guarantees of the company's promoters.
The tribunal also directed IREDA to deposit Rs 20 lakh towards CIRP costs and instructed all concerned authorities, including the Registrar of Companies and IBBI, to be notified of the order.
Gensol Engineering shares hit the 5% lower circuit to halt trading at Rs 48.72 apiece today, July 23.
Gensol Fund Saga
Sebi had barred the Gensol Engineering's promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from the securities market due to allegations of misusing public company funds for personal gain.
The promoters are accused of siphoning off loan funds meant for the company, misleading investors, lenders, and regulators. The interim order not only restricts them from accessing capital markets but also prevents them from holding key positions in any listed company for the time being.
It is the alleged misuse of nearly Rs 262 crore from the Rs 978 crore loaned to Gensol by the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC). The funds were intended for acquiring 6,400 EVs for leasing to BluSmart, but only 4,704 vehicles were purchased. Sebi's findings suggest that a portion of the funds was redirected to personal luxuries, such as high-end real estate, foreign travel, golf equipment, and other personal expenses.
Since the unfolding of the Gensol Fund saga, shares of the company plummeted up to 93 per cent.
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