Gensol Engineering Ltd (GEL), a prominent player in the renewable energy and electric vehicle sectors, is facing insolvency proceedings after defaulting on loans worth INR 510 crore from the Indian Renewable Energy Development Agency (IREDA). The National Company Law Tribunal (NCLT), Ahmedabad bench, admitted IREDA’s plea and has reserved its order after hearing two separate petitions involving both Gensol Engineering and its subsidiary, Gensol EV Lease (GEVL).
The financial trouble at Gensol has been escalating in recent months. According to sources familiar with the matter, IREDA initiated the legal process under Section 7 of the Insolvency and Bankruptcy Code, citing continuous defaults by Gensol on loan repayments. The combined exposure of IREDA to Gensol and GEVL reportedly stands at INR 729 crore.
This development marks a critical juncture for Gensol, once seen as a key enabler of India’s clean energy transition. The company had diversified aggressively into electric vehicle leasing and infrastructure, including its association with BluSmart, a ride-hailing startup co-founded by Gensol’s promoters. However, BluSmart halted operations on April 17, 2025, which triggered further financial strain on Gensol’s balance sheet, particularly in terms of lease payments and asset utilization.
The situation has prompted wider scrutiny from regulators and enforcement agencies. The Economic Offences Wing (EoW) received a complaint from IREDA accusing Gensol’s promoters of diluting their equity without lender approval—a potential breach of loan covenants. This complaint followed an internal probe by IREDA into the usage of disbursed funds and the company’s evolving risk profile.
In parallel, the Securities and Exchange Board of India (SEBI) issued an interim order on April 15 barring Gensol and its promoters from accessing the capital markets. The regulator cited serious corporate governance lapses, including diversion of funds and misuse of company resources for personal gains. A subsequent appeal by Gensol to stay the SEBI order was rejected by the Securities Appellate Tribunal (SAT), further tightening regulatory pressure on the embattled firm.
With both insolvency proceedings and regulatory restrictions looming large, investor sentiment has taken a hit. Gensol’s stock declined by 2% on June 12, closing at INR 51.45. Market analysts believe the company’s financial position has reached a critical stage, and any path to recovery will require substantial restructuring, creditor negotiations, and possibly a change in management.
While the NCLT has not yet passed a final order, the admission of IREDA’s insolvency plea sets the stage for a possible corporate insolvency resolution process (CIRP). If admitted, Gensol would be subjected to a court-supervised resolution framework where creditors and stakeholders must reach an agreement on the company’s revival or liquidation.
The coming weeks will be crucial for Gensol as it navigates the consequences of mounting debt, regulatory scrutiny, and declining investor confidence.
, a prominent player in the renewable energy and electric vehicle sectors, is facing insolvency proceedings after defaulting on loans worth ₹510 crore from the Indian Renewable Energy Development Agency (IREDA).){kind=link}