Last Updated:
The development follows BluSmart’s suspension of operations on April 17, which has halted lease payments and raised red flags for lenders.
Gensol and BluSmart are promoted by brothers Anmol Singh Jaggi and Puneet Singh Jaggi, who are currently under investigation by the Securities and Exchange Board of India (SEBI) for alleged fund diversion and insider trading in Gensol shares.
Public sector financiers Power Finance Corporation (PFC) and Indian Renewable Energy Development Agency (IREDA) are reportedly weighing the auction of over 5,000 electric vehicles (EVs) leased by Gensol Engineering to BluSmart, amid concerns of a potential loan default. The development follows BluSmart’s suspension of operations on April 17, which has halted lease payments and raised red flags for lenders, according to a report by The Economic Times.
The EVs were backed by loans worth Rs 663 crore and hypothecated to the lenders. With BluSmart no longer making payments, ET has reported that PFC and IREDA fear Gensol’s account could soon be classified as a non-performing asset (NPA). As a preemptive measure, they have begun scouting for buyers to recover their dues.
Gensol and BluSmart are promoted by brothers Anmol Singh Jaggi and Puneet Singh Jaggi, who are currently under investigation by the Securities and Exchange Board of India (SEBI) for alleged fund diversion and insider trading in Gensol shares. SEBI has banned the duo from accessing capital markets and from holding key positions in listed entities. They have been given 21 days to respond to the regulator’s show-cause notice.
The deep operational links between Gensol and BluSmart are complicating the situation. There is a concern that once the account slips into NPA, resolution could be prolonged, according to the ET report citing a source familiar with the development.
For now, the lenders have refrained from formally labelling the account as an NPA. They’ve instead relied on a debt-service reserve account maintained by Gensol to cover payment gaps. However, this cushion is expected to run out soon if lease inflows remain stalled.
Credit rating agencies had already downgraded Gensol’s debt to ‘D’ in March, flagging repayment delays. Meanwhile, the promoters’ financial stress is also evident from stock exchange data: the Jaggi brothers currently hold 62.65% in Gensol, of which 81.6%—approximately 19.5 million shares—are pledged.
As of now, Gensol, BluSmart, and the lenders have not issued any official responses, the report said.
