Ireda files insolvency application against Gensol Engineering for default of ₹510 cr

New Delhi: The state-run Indian Renewable Energy Development Agency (Ireda) on Wednesday filed an insolvency application against Gensol Engineering Ltd for a default of ₹510 crore, according to an exchange filing by the clean energy-focused lender.

The development comes nearly three weeks after Ireda filed a complaint with the Economic Offences Wing (EOW) of the Delhi Police against Gensol Engineering for alleged submission of falsified documents and dilution of promoters shares without lenders' approval.

"In furtherance to our earlier letter dated 25.04.2025 with respect to M/s Gensol Engineering Limited, this is to inform you that the Company has filed an application today i.e. May 14, 2025 under Section 7 of Insolvency and Bankruptcy Code, 2016 against M/s Gensol Engineering Ltd, for an amount of default of ₹510,00,52,672/- (Rupees Five Hundred Ten Crore and Fifty Two Thousand Six Hundred and Seventy Two Only)," said the exchange filing. Under Section 7 of the IBC, a financial creditor either by itself or jointly with other financial creditors may file an application for initiating corporate insolvency resolution process (CIRP) against a corporate debtor when a default has occurred.

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While informing the exchanges of its complaint with the EoW on 25 April, Ireda had said that Gensol's account is currently under stress but is not classified as a non-performing asset (NPA). It had also said that it has started an internal review in accordance with RBI guidelines and the company’s due diligence protocols.

In the limelight

The issue came to limelight after the market regulator Sebi (Securities and Exchange Board of India) on 15 April in an interim order barred Gensol’s promoters—Anmol Singh Jaggi and Puneet Singh Jaggi—from trading in the securities market, and from holding any key managerial post in Gensol or any other listed company and a forensic audit was ordered.

Sebi's investigation found that the founders of the cleantech company had siphoned off loans from state-run lenders Power Finance Corp. (PFC) and Ireda for non-related and personal expenses. 

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Gensol allegedly forged letters from PFC and Ireda to show that it was regular in its debt-servicing obligations towards the lenders, which rating agency Icra had earlier highlighted in a statement. Another rating agency Care also mentioned communication such as no objection certificates from the lenders.

According to the market regulator, between FY22 and FY24, Ireda and PFC lent Gensol ₹311.5 crore and ₹352.4 crore, respectively, for buying electric cars for its electric vehicle-based ride-hailing business BluSmart. Gensol put up another ₹166 crore of equity capital, bringing the total to ₹829.9 crore. The money was to be used to purchase 6,400 electric cars. However, the company bought only 4,704 cars for ₹567.7 crore, leaving ₹262.1 crore unaccounted for,

The other state-run lender, PFC, has also filed a complaint with the Economic Offences Wing over Gensol filing falsified documents.

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