Gensol Engineering, a company previously struggling with severe market downturns, made a surprising recovery on May 13. Shares of the company surged by 5%, reaching Rs 56.64 per share, locking the stock in the upper circuit. This unexpected rebound follows a prolonged period of poor performance, where the stock had been stuck in the lower circuit for 17 consecutive sessions.

Resignations Amid SEBI Probe

The surge in Gensol's stock price comes right after the announcement of key management resignations. Anmol Singh Jaggi, the Managing Director, and Puneet Singh Jaggi, the Whole-time Director, both decided to step down. Their resignations were formally linked to an ongoing SEBI investigation, which alleged that the brothers had diverted funds meant for electric vehicle purchases under their joint venture BluSmart.

In their official resignation filing on May 12, the brothers cited SEBI's interim order as the reason behind their decision to leave their posts. This follows a larger controversy involving BluSmart, which was co-founded by the Jaggi brothers in 2019. SEBI's investigation has been focused on whether the company misused loans intended for electric vehicle procurement, directing them instead for personal expenses.

Allegations and Investigations

The core of the investigation centers around a Rs 978 crore loan taken by Gensol Engineering from IREDA and PFC between 2021 and 2024. Of this, a significant portion — Rs 664 crore — was specifically intended to fund the purchase of 6,400 electric vehicles (EVs), to be leased to BluSmart. Gensol was also required to contribute an additional equity margin of 20%, bringing the total investment for the project to an expected Rs 830 crore.

However, in a major discrepancy, SEBI's investigation found that only 4,704 EVs had been purchased for Rs 568 crore, which leaves a Rs 262.13 crore gap unaccounted for. This discrepancy raised significant questions about the actual usage of the funds and led to the stock's downward spiral.

SEBI's Actions and BluSmart's Suspension

In addition to the funds' mismanagement allegations, SEBI's interim order included the debarment of Anmol and Puneet Jaggi from holding any directorship positions in the company. The investigation also led to a temporary suspension of BluSmart's operations, as the company shut down its app on April 17 and suspended bookings. The suspension followed a lack of clarity from BluSmart on the reasons behind the closure, fueling speculation in the market and worsening the stock's performance.

The resignation of the two key directors, combined with these ongoing issues, has had a dramatic impact on Gensol Engineering's stock performance. Gensol shares have seen a drastic fall, with the stock plummeting 93% in 2025 so far. The company's shares have also been locked in the lower circuit in 29 out of the last 34 sessions.

Conclusion

While the recent surge in Gensol's stock price offers some hope, it is still uncertain whether the company can recover from the damage done by the investigation and the resignations of its top leadership. The company’s stock remains vulnerable, with regulatory scrutiny and financial discrepancies clouding its future prospects. Investors will need to monitor developments closely as the situation continues to unfold, especially given the high volatility surrounding Gensol Engineering’s stock in recent months.

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