Gensol Engineering share price hits lower circuit for ninth straight session; here's why

Gensol Engineering share price fell to a 52-week low during Tuesday's trading session after reports surfaced that the markets regulator SEBI identified significant governance issues at Gensol Engineering Ltd. The regulators observed "no manufacturing activity" at the company’s electric vehicle (EV) facility in Pune, noting that only two to three workers were present when an official from the National Stock Exchange (NSE) visited the location earlier this month.

These findings were included in SEBI’s interim order on April 15, issued following a complaint lodged in June 2024 that alleged Gensol's involvement in share price manipulation and the misappropriation of funds by the company and its promoters, according to PTI.

In its investigation, SEBI highlighted numerous inconsistencies and misleading disclosures made by Gensol Engineering, which is led by brothers Anmol Singh Jaggi and Puneet Singh Jaggi.

Based on news reports, an official from the NSE visited Gensol Electric Vehicle Private Ltd's facility in Chakan, Pune, on April 9 and observed minimal activity. "It was discovered that there was no manufacturing taking place at the facility, with only 2-3 workers present," stated SEBI.

The NSE official also examined electricity bills and found that the highest amount billed by Mahavitaran over the past year was only ₹1,57,037.01 in December 2024, which suggests limited electricity consumption and supports the conclusion of no manufacturing operations. "Thus, it can be concluded that there has been no manufacturing activity at the plant, which is located on a leased property," the order explained.

As per reports from media, the site visit occurred after Gensol notified stock exchanges on January 28, 2025, about receiving pre-orders for 30,000 units of its recently introduced electric vehicles presented at the Bharat Mobility Global Expo 2025.

However, SEBI's investigation disclosed that these were merely Memorandums of Understanding (MoUs) with nine organizations for 29,000 vehicles. These MoUs did not specify pricing or expected delivery timelines. "Consequently, it initially seemed that the company was providing misleading information to investors," stated SEBI.

According to reports from various media outlets, Gensol obtained loans totaling ₹977.75 crore from IREDA and PFC between FY22 and FY24. Out of this amount, ₹663.89 crore was designated specifically for the acquisition of 6,400 EVs. However, the company acknowledged that it had only purchased 4,704 vehicles, valued at ₹567.73 crore, as confirmed by supplier Go-Auto. Sebi noted that since Gensol was required to contribute 20 percent in equity, the total investment should have been ₹829.86 crore, resulting in ₹262.13 crore being unaccounted for.

According to media outlets, the regulator discovered that funds intended for the purchase of EVs were redirected to Gensol or related entities owned by the Jaggi brothers. Certain sums were allegedly utilized for personal expenditures, including buying a luxury apartment, transferring money to relatives, and investing in privately held businesses owned by the promoters.

In light of these infractions, SEBI has taken decisive measures. The Jaggi brothers have been prohibited from accessing the securities market and from holding any managerial or directorial positions in Gensol until further notice. Sebi has also instructed Gensol to pause its planned 1:10 stock split. Following the interim ruling, both Anmol and Puneet Singh Jaggi have resigned from the company’s board.

Gensol Engineering share price today

Gensol Engineering share price today opened at an intraday low of ₹106.10 apiece on the BSE. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One stated that Gensol Engineering share price is in news and is currently moving in lower circuits. Technically, view on such stocks is not possibly and considering the negative developments prices are likely to extend lower side and ideally traders should look to exit positions and switch to quality counters.

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