From Clean Energy to Controversy: Gensol Engineering Hit by ED and SEBI Over Fraud Allegations
Business and Industry Overview:
Gensol Engineering Limited started in 2012. It is the main company of the Gensol Group. It provides engineering, procurement, and construction (EPC) services for solar power projects. The company has a strong team of over 240 professionals. It has completed many projects worldwide. Gensol has installed more than 700 MW of solar power, including both ground-mounted and rooftop projects. Apart from solar, Gensol has entered the electric vehicle (EV) sector. It has built a modern EV manufacturing facility in Pune, India. This facility makes electric three-wheelers and four-wheelers. The EVs have received approval from the Automotive Research Association of India (ARAI). Gensol does not just manufacture EVs but also offers leasing solutions. It provides EV leasing to many clients, including government bodies, multinational corporations, ride-hailing companies, logistics firms, educational institutions, and last-mile delivery services. To strengthen its renewable energy business, Gensol has acquired Scorpius Trackers. This company designs and develops advanced solar tracking systems. These systems improve the efficiency of solar power generation. Gensol is also a major player in the solar operations and maintenance (O&M) sector. It has important clients like Delhi International Airport, Suzlon, Greenko, and Essel Infra. With expertise in both solar and EVs, Gensol is expanding its business and playing a key role in clean energy and electric mobility.
Latest Stock News:
Gensol Engineering Limited’s stock hit a 52-week low of ₹110.71 on April 17, 2025, because of serious issues raised by the market regulator, SEBI. On April 15, 2025, SEBI made an interim order after looking into the company’s operations. SEBI found that Gensol’s electric vehicle (EV) plant in Pune had very little activity, with only two to three workers there and no manufacturing happening. This investigation started after a complaint in June 2024, accusing the company and its promoters of manipulating the share price and misusing funds. Gensol had claimed they had pre-orders for 30,000 EVs, but SEBI found these were just MoUs, with no details on pricing or delivery. The company borrowed ₹977.75 crore between FY22 and FY24 for buying EVs, but they only bought 4,704 units, leaving ₹262.13 crore unaccounted for. SEBI also found that money meant for EVs was used for personal expenses, like buying a luxury apartment and transferring money to family members. Because of this, SEBI banned the founders, Anmol and Puneet Singh Jaggi, from holding any important roles or entering the stock market. Since these issues came up, the stock has been falling and hitting lower circuit limits for eight days in a row.
Potentials:
Gensol Engineering has a good future because it works in solar power and electric vehicles (EVs), which are growing fast. The company is building more solar projects because many people and businesses want clean energy. It has also bought Scorpius Trackers, a company that makes solar panels work better by following the sun. Gensol also takes care of solar plants to keep them running well for a long time. The company is also making electric three-wheelers and four-wheelers in Pune. Many businesses want EVs because they cost less to run than petrol or diesel vehicles. Gensol helps companies by giving them EVs on rent, so they do not have to spend a lot of money to buy them. Gensol is also working on battery storage and green hydrogen. Battery storage helps save extra solar power for later use. Green hydrogen is a clean fuel that factories may use in the future. These projects will help Gensol grow more. The government is helping solar power and EVs by giving discounts and support. More people and businesses are using solar energy and EVs because they save money and are good for the environment. With new technology, more business, and government help, Gensol can grow a lot in the future.
Analyst Insights:
- Market capitalisation: ₹ 403 Cr.
- Current Price: ₹ 106
- 52-Week High/Low: ₹ 1,126 / 106
- P/E Ratio: 4.67
- Dividend Yield: 0.00%
- Return on Capital Employed (ROCE): 14.3%
- Return on Equity (ROE): 20.1%
Gensol Engineering Ltd is growing very fast. In the last three years, its revenue grew by 147% every year, and its profit grew by 156% every year. This shows strong business growth. The company works in the solar energy sector, which is growing in India. It also uses its money well. Its return on equity is 20.1%, and return on capital employed is 14.3%. This means the company is earning good profit from the money it uses. The stock is also cheap. The price-to-earnings ratio is 4.67, and the price-to-book ratio is 0.71. These numbers show the stock may be undervalued.
But there are also big risks. The promoters of the company have pledged 81.7% of their shares. This is very risky. If they cannot repay the loan, it can affect the stock badly. Also, the company has taken a lot of debt. In one year, the debt increased from ₹598 crore to ₹1,372 crore. This is a big jump. The interest coverage ratio is low. It means the company may find it hard to pay interest on its loans.
The stock price has also fallen a lot. It is 88% down from its 52-week high. This is a big fall. Even though the stock is cheap and the company is growing fast, the high debt and pledged shares are a big problem.
So, it is better to wait and watch. It is not the right time to buy. Investors should wait until the debt reduces and promoter pledging is lower.