New Delhi: State-owned Indian Renewable Energy Development Agency (IREDA) has initiated insolvency proceedings against Gensol Engineering Limited for defaulting on a loan of ₹510 crore. The proceedings were filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, as disclosed in a regulatory filing to the stock exchanges late Wednesday evening.
The ₹510 crore loan accounts for approximately 0.67% of IREDA’s gross loan portfolio of ₹76,282 crore as of FY 2024–25. The agency stated that the petition was filed with the National Company Law Tribunal (NCLT) on May 14, 2025.
“In furtherance to our earlier letter dated April 25, 2025, this is to inform you that the Company has filed an application today… for an amount of default of ₹510,00,52,672,” IREDA said in its filing.
EoW Complaint and Resignations
IREDA had previously filed a complaint with the Economic Offences Wing (EoW) on April 24, alleging irregularities by Gensol. An internal review had flagged concerns over fund utilization, although the account was not yet classified as a Non-Performing Asset (NPA).
Days later, Gensol’s top leadership – Managing Director Anmol Singh Jaggi and Whole-time Director Puneet Singh Jaggi – tendered their resignations. The Jaggi brothers are also promoters of BluSmart, an EV-based ride-hailing platform that ceased operations on April 17, leading to a suspension of lease payments and escalating lender concerns.
Allegations of Fund Diversion
Gensol had secured loans from IREDA and Power Finance Corporation (PFC) to purchase electric vehicles for leasing to BluSmart. However, SEBI has accused the promoters of diverting the loan funds, prompting a capital market ban that prevents them from holding board positions in any listed entity.
Gensol, in a filing on May 14, said the Securities Appellate Tribunal (SAT) has allowed the company to respond to SEBI’s interim order within two weeks. SEBI must conduct a hearing and issue a final decision within four weeks, as per SAT’s directive.
What Happens Next
The NCLT has seven days to admit or reject IREDA’s petition. If admitted, the tribunal will begin the Corporate Insolvency Resolution Process (CIRP), including the imposition of a moratorium on all debt recovery and legal proceedings against Gensol.
An Interim Resolution Professional (IRP) will be appointed to take over management and form a Committee of Creditors (COC) within 30 days. The COC will then consider and vote on resolution plans. A plan approved by at least 75% of the COC will be submitted to NCLT for final sanction.
Gensol’s case will now be closely watched by stakeholders across the renewable energy and financial sectors, as it highlights both corporate governance risks and the increasing regulatory scrutiny within India’s green energy financing landscape.
