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PFC Flags Rs.307 Crore Default by Gensol Engineering in EV Lease

Synopsis:

Power Finance Corporation disbursed Rs.352 crore to Gensol Engineering for EV leasing in 2023. Rs.307 crore remains unpaid. Investigations are underway following document forgery claims, credit downgrades, and debt servicing delays, impacting Gensol Engineering share price performance.


Power Finance Corporation (PFC) has initiated internal and legal action after Gensol Engineering failed to repay Rs.307 crore of a Rs.352 crore disbursed loan. The funds, sanctioned for leasing electric vehicles to BluSmart Mobility in 2023, have faced repayment delays, triggering scrutiny and formal complaints. PFC has approached the Economic Offences Wing citing forged documentation and irregularities in debt servicing, marking a major development in its EV financing portfolio.

The disbursement was part of a Rs.633 crore package to support EV deployment, with Rs.587 crore allocated for 5,000 four-wheelers and Rs.46 crore for 1,000 electric three-wheelers. However, only the four-wheeler loan was partially utilised.

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ASHOKA BUILDCON LTD

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184.31-8.80 (-4.55 %)

Updated - 30 April 2025
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Key Takeaways

  1. Outstanding Amount: Rs.307 crore unpaid out of Rs.352 crore disbursed by PFC.

  2. Scope of Use: For leasing 3,000 EVs to BluSmart Mobility; 2,741 vehicles delivered so far.

  3. Action Taken: PFC filed complaint over forged documents and activated fraud policy review.

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Timeline Of Loan Disbursement And Default

Repayment on the loan had commenced with Rs.45 crore repaid by Gensol Engineering. However, in Q4 FY24, delays emerged. By February and March, PFC had to invoke the Debt Service Reserve Account (DSRA) to service dues.

Meanwhile, rating agencies CARE and ICRA downgraded Gensol’s long-term loans to default due to persistent delays and the account's classification under special mention account (SMA) status.

Financial Safeguards And Collaterals

PFC holds multiple safeguards against the default risk:

  • Pledged equity shares of Gensol Engineering

  • Non-convertible debentures

  • Corporate guarantee from Gensol Ventures Pvt Ltd

  • Personal guarantees from promoters

  • Lien-marked fixed deposit by BluSmart

  • Trust retention and DSRA balances

Despite these, Rs.307 crore remains overdue, casting uncertainty over fund recovery and affecting Gensol Engineering share price trends in recent sessions.

Project Overview Table

Parameter

Details

Lender

Power Finance Corporation

Borrower

Gensol Engineering

Sanctioned Amount

Rs.633 crore

Disbursed Amount (EV Lease)

Rs.352 crore

Outstanding Amount

Rs.307 crore

Vehicles Delivered

2,741 (out of 3,000)

Complaint Filed

With Economic Offences Wing

Share Price Impact

Under pressure due to loan default issue

The incident places Gensol Engineering’s financial credibility under question. While PFC pursues all recovery options, including invoking guarantees and collaterals, the development has caused ripples in the market, affecting Gensol Engineering share price and investor confidence.

Also read: Ashoka Buildcon Bags Rs.568.86 Crore Railway Contract from Central Railway

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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