Hey folks,

We’re switching things up a bit to make your weekend reading even better — by clubbing the weekly wrap-up with our markets story.

So first, here’s a quick recap of what we wrote over the week. 

On Monday, we told you about the economics of reviving extinct animals. Tuesday’s newsletter explored India’s new plan to stop power cuts forever. Wednesday’s story explained why Apple is looking to expand in India. Thursday’s piece broke down the real reason why quick commerce can’t completely kill Indian kirana stores. And our Friday story told you why India ranks at the top of one global happiness survey and near the bottom of another.

So go ahead and enjoy your weekly dose of Finshots!

And with that out of the way, let’s now dive into today’s markets story, shall we?

SEBI cracks the Gensol and Jaggi web

In today’s Finshots we take a look at the Gensol–BluSmart–Jaggi brothers’ saga and see how deep the financial misgovernance ran.

The Story

We told you why Gensol Engineering’s stock was crashing and why BluSmart – the EV startup it helped power – was in trouble. The red flags were everywhere: sketchy financials, promoter share pledging, and a suspiciously tight-knit relationship between the two companies.

And a day back, we dropped a thread on X laying out how ₹978 crore worth of loans, meant to put more electric vehicles on Indian roads, somehow ended up partly funding luxury apartments and spa sessions.

But let’s take another look at the SEBI’s recent 29-page order that confirmed a lot of what was suspected — and added twists nobody saw coming.

So, what exactly did SEBI find?

Well, pretty much everything.

Let’s take it from the top – the missing money.

Gensol Engineering is in the business of leasing electric vehicles. And to grow that business, it borrowed about ₹663 crore from two government-backed lenders: IREDA and PFC. The money was meant to buy 6,400 EVs. But guess what? Gensol only bought 4,704 EVs at a total cost of ₹567 crore.

Now, if you include the extra 20% margin Gensol had agreed to pay the supplier — kind of like a security deposit — the final bill comes to ₹829 crore. But the actual spending stopped at ₹567 crore. And that leaves one big question — where did the missing ₹262 crore go? There’s no proper explanation since over a year when these loans were taken.

Plus, when this money left Gensol and reached its EV supplier — a company called Go-Auto — it boomeranged. How, you ask? Some of it returned to Gensol. Some got rerouted to companies tied to the promoters — Anmol and Puneet Singh Jaggi. Some even landed with their family members. And in some cases, the money jumped through four or five companies in days.

Why would someone do that? Because it helps clean the trail. On the surface, it looks like a series of business transactions. But behind the scenes, it’s just money quietly making its way into private hands.

And just when you think that’s bad enough, there’s the cover-up.

When credit rating agencies (CRAs) started asking questions, Gensol responded with “no-default” letters claiming that all loan payments were on track. Problem is… those letters were fake.

SEBI checked with IREDA and PFC, and neither of them had issued such clean chits. In fact, the reality was the opposite: Gensol had defaulted on multiple payments and interest on loans. 

Third, we have stock manipulation. As it turns out, a shadow company called Wellray Solar Industries, closely linked to the promoters, was doing heavy trading in Gensol’s own stock. In fact, 99% of all trades made by Wellray from April 2022 to December 2024 were only in Gensol stock.

And where did Wellray get the money to buy these shares? You guessed it — from Gensol and its related entities.

Which means Gensol may have been secretly boosting its own stock price by routing money through a side-door and then buying its own shares from the back. The scale of it was nearly ₹160 crore worth of buy orders. Almost like its only job was to keep the stock price from falling.

Now here’s the thing. When you’re pulling off all this behind-the-scenes, you also need to keep up appearances in public.

Which brings us to the next issue.

In January 2025, Gensol proudly told the stock exchanges that it had secured pre-orders for 30,000 electric vehicles. Sounds impressive, right? Only… SEBI dug in and found that these weren’t actual purchase orders. They were just memorandum of understanding or MoUs — basically loose promises from nine entities for 29,000 cars. No pricing or timelines and nothing to prove that a single EV would ever hit the road.

And when NSE officials visited Gensol’s EV plant in Pune this month, they found… just 2 or 3 workers on site. And the electricity bill? A measly ₹1.5 lakh for the month — barely enough to run the lights, let alone an assembly line. So while investors were being shown a booming order book, the factory floor was practically gathering dust.

And finally, there’s the personal piggybank.

The company promoters — Anmol and Puneet Singh Jaggi — allegedly used Gensol’s money like their own ATM. SEBI mapped out dozens of transfers:

₹25 crore+ sent to Anmol Singh Jaggi’s personal accounts. ₹13 crore to Puneet Singh Jaggi. ₹43 crore apartment in DLF Camellias via Capbridge LLP. ₹6 crore to their mother, ₹3 crore to a spouse. ₹10 lakhs each in credit card bills, spa payments, ₹26 lakhs in a golf set, even over ₹15 lakhs in Titan jewellery.

So… what now?

A year ago, Anmol Singh Jaggi said that Gensol was gunning for ₹2,000 crore in revenue with healthy profit margins. On paper, Gensol had a ₹7,000 crore order book and handled big-ticket EPC contracts in the green energy space. But today, it’s buried under crores in debt and a market cap that’s shrinking.

SEBI’s report has now triggered a full-blown forensic audit. And while the findings are still preliminary, they point to something deeper — a complete breakdown of governance. A listed company allegedly run like a personal fiefdom.

And who gets hurt the most? Around 1.1 lakh shareholders that hold about 65% of Gensol. Many are trapped, watching their investments sink lower every day — unable to exit because the stock keeps hitting lower circuits.

Meanwhile, BluSmart is in crisis mode too. The top brass has quit. Cabs have stopped running. Customers are asking for refunds. 

But this isn’t just about one bad apple. We might often assume strong revenues, public listings, and a trending sector equal trustworthiness. But growth doesn’t guarantee anything. Governance does.

So what can investors take away from all this?

This saga isn’t just a case of corporate fraud. It’s a checklist of what to watch out for.

Too much promoter control? Check if the founders are pledging a big chunk of their shares or constantly raising debt. That’s a red flag. Look out for ‘Related Party Transactions’ in annual reports. If you keep seeing the same names popping up — and they’re bagging fat contracts or unexplained advances — that’s a worry. And look beyond the profit numbers too. If profits are rising but cash flow statements are negative or volatile, something might be fishy.

And the lesson from this entire saga is timeless: when cash flow, governance, and transparency start to crack — no order book, no growth rate, and no “green” narrative can save a company.

For now, SEBI has stepped in. Gensol’s stock split has been halted. The Jaggis are barred from stock markets and directorship in the company. A forensic audit is on. But the clean-up could take months — if not years.

And to wrap this up with a classic Warren Buffett quote…

In the short run, the market is a voting machine. But in the long run, it is a weighing machine.

Well, in the short term, stock prices are all about popularity and fancy headlines. But over time, the market doesn’t care about hype. It weighs the substance: cash flows, governance, accountability.

Until then…

Don’t forget to share this story on WhatsApp, LinkedIn and X.

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