No Further Provisioning Expected For Gensol Engineering: Ireda CMD Pradip Das On Asset Quality In Q1FY26

State-owned renewable energy sector financier Indian Renewable Energy Dev Agency (Ireda) does not see long-term stress from its exposure to troubled Gensol Engineering, its Chairman and Managing Director, Pradip Kumar Das, clarified on Monday.

Speaking to NDTV Profit, Das said that Ireda has done 60% provisioning for Gensol in the current quarter and does not expect further provisioning for the account.

“The 60% provisioning for Gensol was made in this quarter. Based on initial assessments, there is an indication that if the vehicles come back on the road within the next couple of months, the provisioning we have made might not need to be continued in the coming quarters," Das said.

In April, market regulator SEBI barred Gensol Engineering promoters Anmol Singh Jaggi and Puneet Singh Jaggi from stock markets over allegations of misuse of loans amounting to Rs 978 crore. In May, Anmol Singh Jaggi resigned as the Managing Director of Gensol Engineering, while Puneet stepped down as Whole-time Director of the company.

The lender announced its Q1FY26 last week, highlighting that its non-performing assets (NPA) had touched over Rs 1,600 crore. The other account behind Ireda’s worsened NPA figures is Ecron Group, linked to Andhra Pradesh projects. Due to a High Court stay order, the account wasn't earlier classified as NPA.

Explaining this, Das said, “In FY20, we had made full provisioning (for Ecron) as per the rules. So, if you see a minority of our provision has gone up in this quarter….largely on account of Gensol. But whereas the NPA has gone up, it is due to both Gensol and Ecron.”

In its post earnings call, Ireda highlighted that it filed a case against Gensol Engineering at the National Company Law Tribunal (NCLT). It has also approached the Debt Recovery Tribunal (DRT) against the company. The total exposure amounts to nearly Rs 730 crore.

During the June quarter, Ireda's asset quality deteriorated with gross NPA increasing to 4.13% from 2.45% in the preceding quarter. Its net NPA also increased to 2.05% from 1.35% in the March quarter.

The CMD emphasised that Ireda’s core business remains strong and consistent. He claimed that since FY20, Ireda’s gross NPAs have dropped below 1.5% and net NPAs below 1%, without loan book inflation, restructuring, or write-offs.

“The reduction in NPAs over the last five years was not achieved merely by expanding the loan book, restructuring, rescheduling, or writing off loans. Instead, it was driven by substantial recoveries made without significant haircuts. This reflects our strong ability to manage NPA accounts effectively and, over time, protect our stakeholders’ net worth from deterioration due to poor asset quality,” he explained.

In the June quarter (Q1FY26), Ireda reported a net NPA of Rs 1,615 crore compared to Rs 1,021 crore in Q4FY25. Its gross NPA stood at Rs 3,302 crore in Q1FY26 against Rs 1,866 crore in Q4FY25. Revenue from operations increased marginally quarter-on-quarter in Q1FY26 to Rs 1,947 crore compared to Rs 1,904 crore. Profit after tax nearly halved sequentially to Rs 247 crore in Q1FY26 from Rs 502 crore in the preceding quarter.

IREDA shares closed flat at Rs 157.4 apiece, up 0.01%, on the NSE on Monday. In contrast, benchmark Nifty50 closed 0.49% higher at 25,090.7.