In a recent twist in the corporate world, the share price of the Power Finance Corporation (PFC) took a notable hit, dropping by over 3% during the trading session on Wednesday. This decline followed the company’s alarming announcement regarding significant outstanding dues linked to the troubled Gensol Engineering. By 11 AM on April 23, PFC’s stock had decreased by 2.93%, settling at ₹425.30 per share.

Unraveling the Financial Discrepancies

PFC disclosed that out of the ₹352 crore disbursed to Gensol Engineering for electric vehicle leasing in 2023, a whopping ₹307 crore remains unpaid. This revelation has raised eyebrows and prompted PFC to take a firm stance by filing a complaint with the Economic Offences Wing (EoW). The complaint centers on allegations of Gensol submitting fraudulent documents to distort its debt repayment record.

Loan Details and Vehicle Procurement

Earlier in January 2023, PFC extended a loan worth ₹633 crore to Gensol Engineering. This funding was earmarked for acquiring 6,000 electric vehicles—specifically, ₹587 crore for 5,000 electric four-wheelers intended for leasing to BluSmart Mobility, and ₹46 crore for 1,000 electric three-wheelers designated for cargo delivery. However, PFC has clarified that the funds for the three-wheelers were never utilized. Out of the allocated amount for the four-wheelers, ₹352 crore was released for leasing 3,000 EVs to BluSmart Mobility.

• Repayment Status:
  • Total repaid: ₹45 crore
  • Principal outstanding: ₹307 crore as of April 18, 2025
  • Gensol had been servicing its dues regularly until January 31, 2025.

Investigation and Asset Recovery Efforts

As part of PFC’s ongoing efforts to secure its interests, the company is actively pursuing further measures while exploring all available options. To date, 2,741 vehicles have been delivered and confirmed by third-party agencies. PFC holds a pledge over Gensol’s equity shares, along with Non-Convertible Debentures (NCDs), and has received corporate guarantees from Gensol Ventures Private Limited and personal guarantees from its promoters.

In addition, PFC has identified various liquid assets, including TRA balances, Debt Service Reserve Account (DSRA) balances, and fixed deposits from BluSmart, all of which are safeguarded in favor of PFC.

Regulatory Actions and Market Impact

In a related development, the Securities and Exchange Board of India (SEBI) has taken precautionary measures by barring Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from accessing the securities market until further notice. This decision stems from serious allegations of fund diversion and governance issues. Furthermore, SEBI has instructed Gensol Engineering to halt its planned stock split and has restricted the promoters from holding any managerial positions in listed companies. These actions were prompted by a complaint lodged with SEBI in June of the previous year, which accused Gensol of share price manipulation and financial misappropriation.

PFC’s commitment to transparency and diligent recovery efforts reflects the ongoing challenges in the electric vehicle sector and the broader implications for corporate governance in India’s financial landscape. As the situation evolves, stakeholders will be closely monitoring the developments surrounding Gensol Engineering and PFC’s financial maneuvers.