PFC shares under pressure as firm files complaint against Gensol at EoW

Power Finance Corp

Shares of Power Finance Corporation (PFC) dropped 3 percent on Wednesday after the company disclosed that it has filed a formal complaint with the Economic Offences Wing (EoW) against Gensol Engineering, alleging falsification of documents in connection with an electric vehicle (EV) leasing project.

In a statement, the state-owned financier said that out of the Rs 352 crore disbursed to Gensol in 2023 for EV procurement, a substantial Rs 307 crore remains unpaid. The loan was part of a broader Rs 633 crore sanction meant to finance the procurement of 6,000 EVs, including 5,000 electric four-wheelers for BluSmart Mobility and 1,000 electric three-wheelers for cargo operations. However, PFC clarified that the loan for three-wheelers was not availed.

"Until January 31, 2025, Gensol was servicing its dues regularly,” PFC noted. The turning point came in the March quarter, when the company had to invoke the Debt Service Reserve Account (DSRA) to clear dues for February and March. So far, only Rs 45 crore has been repaid, PFC added.

The complaint comes after ratings agencies CARE and ICRA downgraded Gensol’s credit rating last month, citing document falsification. PFC, however, asserted that it did not issue the letters referred to by these agencies.

"Considering these red flags, the matter is under investigation internally under PFC’s Anti-Fraud Policy," the company said, reaffirming that it is committed to recovering its dues and upholding transparency in its operations.

The escalating legal action adds to the scrutiny on Gensol Engineering and could weigh on sentiment for EV-linked players, particularly those dependent on large-ticket institutional funding.