Once hailed as a shining star in India’s renewable energy and electric vehicle (EV) sectors, Gensol Engineering Ltd. has unraveled into one of the most brazen corporate scandals of 2025. The company, led by promoters Anmol Singh Jaggi and Puneet Singh Jaggi, promised to power India’s green future with solar projects and EV leasing. Instead, it became a cautionary tale of financial mismanagement, forged documents, and diverted funds—costing investors billions and shattering trust in the startup ecosystem. With shares plummeting 90% from their June 2024 peak and regulators closing in, the Gensol saga reveals a fraud that was, in many ways, hiding in plain sight.
The Rise of a Green Giant
Founded in 2012 by the Jaggi brothers, Gensol began as a solar engineering, procurement, and construction (EPC) firm, capitalizing on India’s push for renewable energy. By 2019, it listed on the BSE SME platform, transitioning to the main board in 2023. The company rode the EV wave through its leasing arm, supplying vehicles to BluSmart, an EV ride-hailing startup also co-founded by the Jaggis. Gensol’s stock soared, climbing 2,600% between 2022 and 2024, reaching an all-time high of ₹1,124.90 in June 2024. Its market capitalization peaked at ₹4,300 crore, and retail investors, numbering over 110,000 by March 2025, poured in, drawn by promises of a clean energy revolution.
Gensol’s narrative was compelling: a young, innovative company with a ₹7,000 crore order book, 30,000 EV pre-orders, and a sleek new EV unveiled at the Bharat Mobility Global Expo 2025. But beneath the polished press releases and ambitious projections, cracks were forming—cracks that regulators, investors, and even casual observers could have spotted with closer scrutiny.
Red Flags Ignored
The warning signs were there for those who looked. As early as March 2024, posts on X flagged Gensol’s dubious connections, with one user linking the company to Zenith Multi Trading DMCC, a firm caught by the Enforcement Directorate for fraud in pump-and-dump schemes. By February 2025, liquidity issues surfaced. Gensol’s chief financial officer, Ankit Jain, resigned on March 6, signaling internal turmoil. The company’s linkage to BluSmart, a loss-making entity burning ₹20 crore monthly, raised concerns about financial flexibility, as lease payments from BluSmart to Gensol were delayed.
Gensol’s financials also raised eyebrows. Its Days Sales in Receivables Index (DSRI) of 1.17 showed revenue growth outpacing cash conversion, with receivables rising from 49 days in FY23 to 57 days in FY24—a potential sign of inflated sales. The Beneish M-score, a tool to detect earnings manipulation, flagged Gensol at -1.49, above the -1.78 threshold for likely manipulation. Social media users pointed out discrepancies, with one noting that Gensol’s profit and loss statement showed ₹50 crore in taxes paid over five years, while cash flow statements reflected only ₹10 crore in actual tax payments—a basic accounting red flag.
Yet, Gensol deflected scrutiny. In a February 2025 investor call, management claimed ₹250 crore in liquidity and access to ₹350-400 crore in working capital. When credit rating agencies ICRA and CARE downgraded Gensol to ‘D’ in March 2025, citing delayed loan payments, the company attributed it to a “short-term liquidity mismatch” and denied falsification claims. Investors, lured by the green energy hype, largely overlooked these signals—until the Securities and Exchange Board of India (SEBI) stepped in.
SEBI’s Damning Revelations
On April 15, 2025, SEBI issued a 29-page interim order that exposed Gensol’s operations as a “corporate thriller” of fraud, forgery, and governance failures. The investigation, triggered by a June 2024 complaint about share price manipulation and fund diversion, uncovered a web of financial misconduct orchestrated by the Jaggi brothers. SEBI accused them of treating Gensol like a “personal piggy bank,” siphoning off funds for luxury purchases and related-party transactions while misleading investors, lenders, and regulators.
At the heart of the scandal was the misuse of ₹977.75 crore in loans from state-owned lenders Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC), intended to purchase 6,400 EVs for leasing to BluSmart. Only 4,704 EVs were acquired, costing ₹567.73 crore, leaving ₹262.13 crore unaccounted for. SEBI traced these funds through Go-Auto Pvt. Ltd., Gensol’s EV supplier, to entities controlled by the Jaggis. Notable diversions included:
- Luxury Real Estate: ₹42.94 crore was funneled to Capbridge Ventures LLP, a firm linked to the Jaggis, to buy an apartment in The Camellias, Gurgaon, initially booked in their mother’s name.
- Stock Manipulation: ₹101.35 crore was routed through Wellray Solar Industries to trade Gensol’s own shares, artificially inflating its price.
- Personal Expenses: Funds covered foreign travel, golf equipment, credit card bills, and transfers to relatives, including ₹50 lakh to Third Unicorn, a startup tied to controversial entrepreneur Ashneer Grover.
- Circular Transactions: ₹10 crore was looped through four companies in a single day to create an illusion of legitimate business activity.
Gensol also submitted forged “Conduct Letters” and “No Objection Certificates” to ICRA and CARE, claiming timely debt servicing to IREDA and PFC. When the agencies verified with the lenders, they confirmed the documents were fake, revealing defaults on loan repayments. SEBI’s findings painted a picture of a “complete breakdown” of corporate governance, with the Jaggis running a listed company like a “proprietary firm.”
The Fallout: Investors and BluSmart Pay the Price
The consequences were swift and brutal. SEBI barred the Jaggi brothers from the securities market, prohibited them from holding directorial roles, and halted Gensol’s proposed 1:10 stock split, which could have lured more retail investors. The stock, already in free fall since February 2025, crashed another 5% daily, hitting ₹110.71 by April 21, wiping out ₹3,800 crore in investor wealth from its June 2024 peak.
BluSmart, heavily reliant on Gensol’s leased EVs, collapsed under the weight of the scandal. By April 17, 2025, it suspended operations in Delhi-NCR, Bengaluru, and Mumbai, leaving users unable to book rides. A rumored deal with Eversource Capital fell apart, and a proposed slump sale never materialized. High-profile investors like MS Dhoni, Deepika Padukone, and Ashneer Grover, who backed BluSmart’s $3 million angel round in 2019, faced significant losses.
Regulators and lenders escalated the pressure. IREDA and PFC, owed ₹975 crore, planned to approach the Economic Offences Wing (EOW) over the forged documents, while the Ministry of Corporate Affairs launched a suo motu inquiry into Gensol’s financial records. Three independent directors and the Jaggi brothers stepped down from Gensol’s management, and a forensic audit was ordered to probe deeper.
A Fraud in Plain Sight
The Gensol scandal was not a sophisticated scheme—it was a fraud enabled by audacity and oversight failures. The Jaggis’ actions were blatant: forging documents, diverting funds to luxury purchases, and inflating order books with non-binding MoUs. A National Stock Exchange inspection in April 2025 found Gensol’s Pune EV factory nearly empty, with only two to three workers, debunking claims of 30,000 pre-orders. Yet, for years, investors, auditors, and regulators missed or ignored the signs.
Industry experts called it a “reality check” for India’s startup ecosystem. Aman Gupta, co-founder of boAt, noted that the fraud “dented trust” in startups, urging founders to prioritize governance. Vijay Kedia, a veteran investor, warned of “many more Gensols hiding in the cupboard,” sharing ten red flags—like grand promises without evidence and constant media hype—that could have flagged Gensol earlier. The Institute of Chartered Accountants of India (ICAI) faced criticism for not probing the auditors’ failure to detect misreporting and related-party transactions, reigniting calls for audit reforms.
Lessons for the Future
The Gensol saga underscores the fragility of investor trust in high-growth sectors like clean energy and EVs. Retail investors, swept up in the green hype, overlooked basic due diligence, while auditors and rating agencies failed to challenge falsified documents. Tools like the Beneish M-score or simple accounting checks, as highlighted by X users, could have exposed discrepancies years earlier.
For India’s startup ecosystem, the fallout is a wake-up call. Regulators must tighten oversight of related-party transactions and small-cap governance, while investors need to prioritize fundamentals over narratives. As Tarun Singh of Highbrow Securities noted, “Markets have a long memory when it comes to governance failures—this stain will linger long after the headlines fade.”
Gensol’s stock, now under the BSE’s ‘T’ group with a 5% circuit limit, faces permanent de-rating. BluSmart’s shutdown and the Jaggis’ ban from markets mark the end of their green empire. But the broader lesson remains: frauds like Gensol thrive when ambition outpaces accountability. In a market hungry for the next big thing, the red flags were there—plain for all to see.
Sources: Business Standard, India Today, Moneycontrol
