When Gensol Engineering made its public market debut through a small and medium enterprises (SME) initial public offering (IPO) in September 2019, its promoters held a commanding 96 per cent stake.
Now, that figure has shrunk to a “negligible” fraction.
According to an order by the Securities and Exchange Board of India (Sebi), this steep decline was not organic but allegedly orchestrated through a network of false disclosures, sham transactions, and diverted funds, which effectively led to a near-total promoter exit, even as unsuspecting investors were left holding the bag.
The company’s Rs 18 crore IPO had seen modest demand, having been subscribed 1.3 times with total bids of Rs 23 crore.
After listing, the promoters’ holding dropped to 70.72 per cent.
In July 2023, Gensol — in the business of providing solar consulting services, and engineering, procurement and construction (EPC) services — shifted to the mainboard, gaining access to a broader and more liquid investor base.
Ahead of this migration, promoter ownership of the firm stood at 64.67 per cent in June 2023.
There were fewer than 2,700 individual shareholders collectively holding a 24.85 per cent stake at the time.
The total number of public shareholders remained under 3,000.
Despite the alleged involvement of brothers Anmol Singh Jaggi and Puneet Singh Jaggi – the company’s promoters and well-regarded names in India’s cleantech startup space – in a fraud, public shareholding surged to nearly 110,000, climbing to around 65 per cent, even as promoter ownership dropped to about 35 per cent.
Sebi noted that promoter holding might have fallen further to negligible levels, as lenders, including Indian Renewable Energy Development Agency Ltd (Ireda), sold shares pledged by promoters as loan collateral.
“We have been informed by Ireda vide email dated April 11, 2025, that promoters have created pledges for 7.57 million shares of Gensol.
"Further, the latest pledge invocation data available on the BSE website indicates that more pledges have been invoked during this month,” stated the Sebi order.
“This would lead to the possible conclusion that promoter shareholding in Gensol would become even lower, may be negligible, if Ireda were to invoke the pledge created by Anmol Singh Jaggi and Puneet Singh Jaggi.”
An email query sent to Gensol remained unanswered at the time of going to press.
The order also revealed that the Jaggi brothers allegedly made several false disclosures to stock exchanges with an intention of propping up investor sentiment towards the stock.
For instance, on January 28, 2025, Gensol announced it had secured pre-orders for 30,000 electric vehicles.
The stock price rose 15 per cent over the next two days.
A subsequent review found these were non-binding memoranda of understanding (MoUs) with nine entities for 29,000 vehicles, without any pricing and delivery schedules.
An on-site inspection at Gensol’s EV plant in Pune by exchange officials revealed the presence of only two to three workers, and an electricity bill of Rs 1.6 lakh for December 2024 – insufficient for active vehicle production.
“It can be inferred that there has been no manufacturing activity at the plant site which is on a leased property,” Sebi stated.
On January 16, Gensol announced a strategic tieup with Refex Green Mobility for the transfer of 2,997 EVs, along with Refex assuming Gensol’s Rs 315 crore loan.
The deal was withdrawn on March 28, 2025.
Separately, on February 25, Gensol disclosed a non-binding term sheet for a Rs 350 crore strategic sale of its US subsidiary, Scorpius Trackers Inc, incorporated just months earlier in July 2024.
When Sebi sought to know the basis for this valuation, Gensol failed to provide any justification.
The stock price had again rallied ahead of the strategic sale announcement.
Further, the Sebi order revealed that Wellray Solar Industries, a related party, actively traded Gensol shares for significant profit.
The Jaggi brothers, who were directors of Wellray, held its entire shareholding until April 2020 before transferring ownership to Lalit Solanki, Gensol’s former regulatory affairs head.
Wellray was listed as a public shareholder and invested in Gensol.
Over the years, numerous financial transactions between the two companies allegedly inflated Gensol’s revenues, though Sebi determined that much of this lacked commercial substance.
To allegedly obscure its dealings in Gensol shares, Wellray made minor investments in other firms including Tata Motors, Tata Chemicals, and Reliance Infrastructure.
However, from April 2022 to December 2024, nearly 99 per cent of Wellray’s total trading value was concentrated in the Gensol stock.
Sebi concluded that Gensol and its promoters – or related entities – financed Wellray’s stock trading activities, violating Section 67 of the Companies Act, 2013. Wellray earned sizeable profits from these trades, according to the order.
In another move aimed at attracting retail investors, Gensol’s board in March proposed a 1:10 stock split to make shares more affordable.
The markets regulator, however, has since ordered the withdrawal of this proposal.
“The promoter stake in the company has already seen a significant decline, and there is a risk that the promoters may further offload their shares to unsuspecting investors.
"Therefore, it is essential that the alleged misconduct outlined above is brought to light through appropriate regulatory action,” Sebi stated in its order.
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