The Rise and Fall of Gensol Engineering: Allegations Against the Jaggi Brothers
Once regarded as key players in India’s renewable energy landscape, brothers Anmol Singh Jaggi and Puneet Singh Jaggi are currently embroiled in severe allegations of financial misconduct that have significantly tarnished their reputations and businesses.
Overview of Allegations
The Securities and Exchange Board of India (Sebi) has taken a decisive step by prohibiting the Jaggi siblings from trading in securities until further notice. This action was triggered by suspicions of misappropriating loan funds from their publicly traded company, Gensol Engineering, for personal expenses. These developments raise critical concerns about corporate governance standards within the firm.
Gensol Engineering: A Snapshot
Established as a solar consulting and engineering firm, Gensol Engineering has made strides in various sectors including engineering, procurement, construction (EPC) services, and electric vehicle (EV) leasing. The company first appeared on the BSE SME platform on October 15, 2019, and later transitioned to the main board of both BSE and NSE on July 3, 2023. Its growth trajectory has been remarkable, with standalone sales soaring from ₹61 crore in FY17 to a projected ₹1,152 crore in FY24.
- Operating Profit: Increased from ₹2 crore to ₹209 crore from FY17 to FY24.
- Net Profit: Grew from ₹2 crore to ₹80 crore over the same period.
- Balance Sheet Expansion: From ₹10 crore in FY17 to ₹2,202 crore in H1 FY25.
- Borrowings: Grew from zero to ₹1,045 crore, peaking at ₹1,260 crore in FY24.
- Shareholder Growth: Count surged from 155 in FY20 to 109,872 as of March 31, 2025.
Stock Performance and Credit Rating Concerns
The successful performance of Gensol was reflected in its stock price, which reached a high of ₹1,126 per share last year, resulting in a market capitalization of ₹4,300 crore. However, by April 11, 2025, the stock price had significantly decreased to ₹133 per share, valuing the company at ₹506 crore.
In June 2024, Sebi started investigating complaints regarding potential share price manipulation and fund diversion linked to Gensol. Credit rating agencies, CARE Ratings and Icra, subsequently downgraded Gensol’s ratings to “D” due to issues with servicing debt obligations. Icra raised alarms over documents allegedly provided by Gensol being falsified, suggesting significant corporate governance issues and liquidity concerns within the firm.
Investigation Findings and Financial Mismanagement
Sebi’s probe revealed a troubling narrative of financial mismanagement and fund diversion. The investigation found that between FY22 and FY24, the firm secured ₹977.75 crore in loans intended for the purchase of 6,400 EVs; however, it acquired only 4,704 EVs worth ₹567.73 crore. This discrepancy resulted in ₹262.13 crore, which remains unaccounted for.
Moreover, it was uncovered that substantial funds allocated for EV purchases had been redirected back to Gensol or to entities associated with the Jaggi brothers. Personal expenditures of the promoters raised eyebrows, including:
- ₹42.94 crore for a luxury apartment through Anmol Singh Jaggi’s Capbridge Ventures.
- ₹50 lakh invested in Third Unicorn, a startup founded by Ashneer Grover.
- Transfers of ₹6.20 crore to Anmol’s mother and ₹2.98 crore to his wife.
- Extravagant purchases, such as a ₹26 lakh golf set.
The Corporate Governance Crisis
The regulatory body characterized the actions of the promoters as treating the company akin to a personal “piggy bank,” indicating blatant disregard for shareholder welfare. The ramifications of these financial misappropriations could necessitate writing off these diversions from the company’s accounts, ultimately affecting investor confidence and value.
Conclusion
The saga of Anmol and Puneet Singh Jaggi underscores the critical need for robust corporate governance practices in rapidly evolving sectors like renewable energy. The unfolding story not only highlights the potential consequences of financial misconduct but also reflects on the broader implications for stakeholders in the industry.
