Gensol Engineering Shares Hit Lower Circuit After Sebi's Ban

Gensol Engineering shares experienced a 5% drop, hitting the lower circuit limit on the BSE, following the Securities and Exchange Board of India (Sebi)'s decision to bar the company and its promoters from the securities market. This action was taken due to allegations of fund diversion and significant corporate governance lapses.

Details of Sebi's Order

Sebi's order accuses promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi of misusing company funds for personal benefits. Both have been prohibited from holding any directorial or key managerial positions in Gensol Engineering until further notice. Additionally, the company has been instructed to halt its recently announced stock split.

Investigation Findings

The regulator's investigation, initiated after a June 2024 complaint, uncovered evidence of share price manipulation and financial irregularities. Sebi found that the company submitted forged documents and made misleading statements to rating agencies, lenders, and investors.

ICRA's Downgrade and Falsified Documents

ICRA downgraded Gensol's bank facilities rating to [ICRA]D, citing delays in debt servicing, contrary to the company's claims of having "sizeable available liquidity". Audit findings revealed that some documents provided by Gensol regarding its debt servicing were falsified, raising concerns about its governance and financial health.

Company's Response

Gensol had previously denied any wrongdoing, with CEO Anmol Singh Jaggi issuing a statement rejecting the falsification claims made by the rating agency.

Gensol's Market Journey

Listed on the BSE SME Platform in October 2019, Gensol moved to the main boards of both the BSE and NSE in July 2023. The company has shown remarkable revenue growth from Rs 61 crore in FY 2017 to Rs 1,152 crore in FY 2024.