Gensol Engineering Limited saw a reduction in its pledged shareholding after Catalyst Trusteeship Limited sold 7,79,204 equity shares, representing 2.03% of the company's total voting capital. The sale was executed on behalf of the lender, Power Finance Corporation Limited, following the invocation of pledges held by Gensol Ventures Private Limited.

The disclosure, filed under Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, indicates that the shares were sold between September 28, 2026, and October 6, 2026. Prior to this transaction, the acquirer along with persons acting in concert held 25,65,972 shares in the nature of encumbrance, accounting for 6.67% of the total diluted share capital.

Details of the Share Sale

Catalyst Trusteeship Limited acted as the security trustee for the benefit of Power Finance Corporation Limited. The transaction involved the sale of shares originally pledged by Gensol Ventures Private Limited. The acquirer does not belong to the promoter or promoter group.

Transaction Specifics

The mode of acquisition was recorded as a sale of equity shares. The total equity share capital of Gensol Engineering remained unchanged at 3,84,46,368 equity shares of ₹10 each before and after the transaction. The specific dates of sale spanned six trading days: September 28, September 29, September 30, October 1, October 5, and October 6, 2026.

What the Numbers Show

The reduction in pledged shares from 6.67% to 4.64% signifies a partial liquidation of collateral by the lender. This movement reduces the immediate overhang on the stock from this specific tranche of pledged shares, although a significant portion remains encumbered. The absence of any direct acquisition of voting rights by the trustee suggests the primary intent was debt recovery rather than strategic accumulation of control.

The Indian Renewable Energy Development Agency (IREDA) has formally classified loan accounts linked to Gensol Engineering and its associated entity, Gensol EV Lease, as fraud. The decision follows findings related to misuse of funds, breach of trust, and forgery, with IREDA reporting both accounts to the Reserve Bank of India (RBI) as mandated under applicable regulatory norms. The combined exposure across both classified accounts stands at ₹672.74 crore, underscoring the significance of the development for IREDA's asset quality and its broader implications for the renewable energy financing landscape.

Fraud Classification Details

IREDA has identified two separate loan accounts as fraudulent. The following table outlines the key details of the classified accounts:

Grounds for Classification

The fraud classification by IREDA is based on three primary grounds:

• Misuse of funds: Loan proceeds were allegedly not utilised for their intended purpose.
• Breach of trust: The borrowing entities are alleged to have violated the fiduciary obligations and terms agreed upon with IREDA.
• Forgery: Fraudulent documentation is cited as part of the basis for the classification.

Regulatory Reporting

In line with regulatory obligations, IREDA has reported both the Gensol Engineering and Gensol EV Lease loan accounts to the RBI. Such reporting is a standard requirement under RBI guidelines when a lender classifies a borrower account as fraud, ensuring systemic oversight and enabling coordinated action across the financial sector. The order regarding this classification was issued by IREDA on July 9, 2026.