**Power Finance Corp. Identifies Fraud in Gensol Engineering Loans**
State-run Power Finance Corporation (PFC) has classified its loan exposure to Gensol Engineering Ltd as fraudulent following preliminary investigations. The company has fully provisioned the loan amount, as stated by Parminder Chopra, the chairman and managing director of PFC. During a recent media briefing, Chopra revealed that the lender has recovered ₹44 crore through the encashment of fixed deposits and the trust and retention account (TRA) associated with the loan, reducing the outstanding loan balance to ₹263 crore.
Chopra emphasized that the decision to classify the situation as fraud was based on initial inquiries, noting that there are no overdue payments in PFC’s records. “This is a promoter-specific event and does not indicate a sector-wide risk. The project does not reflect on PFC’s appraisal methodology or risk mitigation strategies,” she explained. She also reiterated that non-performing assets (NPAs) are a common risk for financial institutions.
PFC had initially disbursed ₹352 crore to Gensol for leasing 3,000 electric vehicles, of which 2,741 vehicles have been delivered and hypothecated. Chopra mentioned that the lender is exploring recovery options through the insolvency and bankruptcy process if other recovery methods prove insufficient. She confirmed that all avenues, including the debt recovery tribunal (DRT), remain open. Additionally, the Indian Renewable Energy Development Agency (Ireda) has already taken legal action against Gensol at the National Company Law Tribunal (NCLT).
“If recovery efforts fall short, we may consider joining the insolvency proceedings, depending on the case’s admission,” Chopra stated. PFC reported a 23.5% increase in net profit, reaching ₹5,109 crore by the end of March, driven by higher net interest income and successful bad loan recoveries. The net profit for the same period last year was ₹4,135 crore, with net interest income rising to ₹5,910 crore from ₹4,236 crore.
The net interest margin (NIM) improved to 3.64% at the end of FY2025, compared to 3.46% the previous year. PFC successfully recovered its entire ₹3,300 crore exposure from JSW Energy’s acquisition of KSK Mahanadi Power and anticipates further recoveries from two other NCLT assets, Sinnar Thermal Power and India Power Corporation (Haldia). The company is also looking forward to resolving two additional assets, Shiga and TRN Energy, outside the NCLT framework.
PFC’s loan portfolio grew by 12.8% year-on-year, totaling ₹5.43 trillion by the end of March 2025, with the renewable loan book standing at ₹81,031 crore. However, the corporation has revised its loan growth target for FY26 to 10-11%, down from the previous 12-15%. Recently, the Securities and Exchange Board of India (Sebi) issued an interim order barring Gensol Engineering and its promoters, Anmol Singh Jaggi and Puneet Singh Jaggi, from the securities market.
**FAQ**
**What actions is PFC taking regarding the loan to Gensol Engineering?**
PFC has classified the loan to Gensol Engineering as fraudulent and has fully provisioned the amount. The corporation is exploring recovery options, including potential insolvency proceedings, if necessary.
