NCLT admits IREDA’s plea against Gensol; IREDA files another insolvency plea

New Delhi: The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted Indian Renewable Energy Development Agency’s (IREDA) insolvency plea against Gensol Engineering on Friday. IREDA had initiated insolvency proceedings against Gensol on May 14 over loan default of Rs 510 crore. The bench comprises judicial member Shammi Khan and technical member Sanjeev Kumar Sharma.

PSU Watch is now on Whatsapp Channels. Click here to join

NCLT declines IREDA’s request to appoint IRP

On Friday, the bench decline IREDA’s request to appoint an Interim Resolution Professional (IRP), stating that Gensol Engineering must be heard first. In its plea, IREDA’s counsel argued for immediate oversight in the form of an IRP, stating that Gensol is headless after its directors allegedly fled after regulatory scrutiny. “Sir, by virtue of Sebi’s (Securities and Exchange Board of India) order, the company is now headless. Directors have walked out and the company has projects worth crores of rupees. Somebody needs to manage the show,” IREDA’s counsel said.

IREDA also alleged “a complete breakdown of internal controls and corporate governance norms” at Gensol, accusing the promoters of running the listed firm “as if it were their proprietary firm.” IREDA also highlighted Gensol’s “substantial order book” comprising strategically significant renewable EPC contracts awarded by the government and public sector undertakings (PSUs), which it described as “capital-intensive” projects. The bench has now listed the case for hearing on June 3.

IREDA initiates insolvency proceedings against Gensol subsidiary

Separately, IREDA initiated insolvency proceedings on Friday against Gensol EV Lease Limited, a subsidiary of Gensol Engineering, over loan default of Rs 218.95 crore, a regulatory filing made by the PSU to the stock exchanges said. This is in addition to the Rs 510-crore loan default, for which an insolvency plea filed by IREDA has already been admitted by the NCLT, as mentioned above. “This is to inform you that the Company has filed an application under Section 7 of Insolvency and Bankruptcy Code, 2016 on May 15, 2025 against M/s Gensol EV Lease Limited which is a subsidiary of M/s Gensol Engineering Limited (Listed company) for an amount of default of Rs. 218.95 Crore (Rupees Two Hundred and Eighteen Crore Ninety Five Lakh),” IREDA told the bourses.

The total loan default amount that IREDA is looking to recover from Gensol now stands at Rs 728.95 crore. This amount represents approximately 0.95 percent of IREDA’s total gross loan portfolio of Rs 76,282 crore, as per FY2024-25 data.

Impact on IREDA shares

On April 24, IREDA initiated an internal review against Gensol Engineering and also filed a complaint with the Economic Offences Wing (EoW). Between April 24 and May 16, IREDA’s shares have dropped from Rs 175.14 apiece (April 24) to Rs 173.29 (May 16). This represents a decrease of approximately 1.06 percent over the period. The modest decline suggests that the market has largely absorbed the news of IREDA initiating insolvency proceedings against Gensol Engineering to recover its Rs 728.95-crore loan. The limited impact on the share price indicates that investors may perceive this exposure as manageable, considering IREDA's total gross loan portfolio of Rs 76,282 crore.

Gensol under scrutiny for fund diversion

Gensol was to purchase electric vehicles (EVs) from the loans secured from IREDA and Power Finance Corporation (PFC), before leasing them to ride-hailing platform BluSmart. Brothers Anmol Singh Jaggi and Puneet Singh Jaggi, promoters of Gensol and BluSmart, are facing regulatory action by the Securities and Exchange Board of India (SEBI) over allegations of diversion of the loan money meant for EV purchase. SEBI has imposed a capital market ban on the duo, barring them from holding positions in listed companies.

BluSmart suspended operations on April 17, leading to ceasing of lease payments and raising concerns among lenders that the Gensol loan account could soon turn into a non-performing asset.

In a regulatory filing to the stock exchanges on May 12, Gensol Engineering had announced that its promoters, Anmol Singh Jaggi Managing Director, and Puneet Singh Jaggi, whole-time Director, have tendered their resignation.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)