In This Economy... From Conflict Zones To Corporate Corridors

Last week, the financial world was anything but calm! From the alarming developments at IndusInd Bank to federal scrutiny of Gensol Engineering, the markets had plenty to chew on. But before diving into the corporate intricacies, let’s first address the chilling events that unfolded in the breathtaking valley of Kashmir.

A tragic terror attack in Pahalgam not only sent shockwaves through the region but also disrupted airspace, heightening tensions in an already volatile environment.

This tragic event occurs at a time when India-Pakistan relations remain fragile, with growing focus on the Indus Water Treaty amid rising geopolitical tensions.

The ripple effects of these developments are not just political; they have the potential to shake trade, economic stability, and market sentiment in the days to come.

Turning back to the business world, first up—just a day after IndusInd Bank’s board began shaking things up at the top, Deputy CEO Arun Khurana has stepped down. His resignation comes in the wake of a massive Rs 1,959.98 crore accounting impact, which has the bank scrambling to realign its leadership. The timing is telling. With the board hitting reset on key roles, this exit only adds fuel to the ongoing management overhaul. Buckle up—there could be more changes ahead.

Meanwhile, Gensol Engineering, a rising star in the clean energy sector, is facing its own storm. The Enforcement Directorate had conducted search operations on the premises of Anmol and Puneet Jaggi—founders of Gensol Engineering and BluSmart Mobility—and even quizzed Puneet Jaggi, co-founder of Gensol and BluSmart Mobility, for long hours over alleged forex violations. The agency also issued a lookout circular against the duo. The market didn’t take the news well, and the stock took a sharp dive.

This comes at a time when Commerce Minister Piyush Goyal made sharp remarks at the Startup Mahakumbh, where he questioned whether Indian startups are truly creating transformative value.

Last week, the financial world was anything but calm! From the alarming developments at IndusInd Bank to federal scrutiny of Gensol Engineering, the markets had plenty to chew on. But before diving into the corporate intricacies, let’s first address the chilling events that unfolded in the breathtaking valley of Kashmir.

A tragic terror attack in Pahalgam not only sent shockwaves through the region but also disrupted airspace, heightening tensions in an already volatile environment.

This tragic event occurs at a time when India-Pakistan relations remain fragile, with growing focus on the Indus Water Treaty amid rising geopolitical tensions.

The ripple effects of these developments are not just political; they have the potential to shake trade, economic stability, and market sentiment in the days to come.

Turning back to the business world, first up—just a day after IndusInd Bank’s board began shaking things up at the top, Deputy CEO Arun Khurana has stepped down. His resignation comes in the wake of a massive Rs 1,959.98 crore accounting impact, which has the bank scrambling to realign its leadership. The timing is telling. With the board hitting reset on key roles, this exit only adds fuel to the ongoing management overhaul. Buckle up—there could be more changes ahead.

Meanwhile, Gensol Engineering, a rising star in the clean energy sector, is facing its own storm. The Enforcement Directorate had conducted search operations on the premises of Anmol and Puneet Jaggi—founders of Gensol Engineering and BluSmart Mobility—and even quizzed Puneet Jaggi, co-founder of Gensol and BluSmart Mobility, for long hours over alleged forex violations. The agency also issued a lookout circular against the duo. The market didn’t take the news well, and the stock took a sharp dive.

This comes at a time when Commerce Minister Piyush Goyal made sharp remarks at the Startup Mahakumbh, where he questioned whether Indian startups are truly creating transformative value.

About a dozen years ago, the startup boom began creating a new kind of celebrity—founders who built companies, created jobs, and made wealth. These “unicorn” founders became stars, admired like cricketers and film actors. Some even gained large followings on social media.

But from time to time, events occur that shake up this image and raise tough questions. One such case is the recent action by the Securities and Exchange Board of India against Anmol Singh Jaggi and his brother Puneet. They are the founders of Gensol Engineering and are accused of fraud and misuse of company funds. The Jaggi brothers also founded BluSmart Mobility, known for its electric cabs, especially in areas like Gurgaon, where their white cars with green number plates were everywhere.

Investigators now suggest the brothers may have spent lavishly on luxury apartments – this isn’t the fairy tales many had envisaged.

Gensol’s stock has crashed a staggering 86% this year. It’s no typo—shares have plummeted to a 52-week low of Rs 130.15. Investors have watched Rs 3,800 crore in market value evaporate, while a flashy EV plant in Pune has turned into a ghost town, with just two-to-three workers and little to no electricity. It’s hard to believe, but the numbers don’t lie.

As the gap between startup hype and real impact widens, the shine of the unicorn club is quickly fading. It’s a tough moment for the ecosystem, and the cracks in governance can no longer be ignored. The bubble may be bursting.

Gensol pitched itself as the future of clean energy. Big promises. Big loans—thanks to public sector lenders like PFC and IREDA. But instead of fuelling solar panels and EVs, Rs 96.69 crore found its way into entities linked to the Jaggi brothers, while Rs 37.5 crore ended up in Anmol Jaggi’s personal account.

Yes, personal.

In June 2024, SEBI launched an investigation into the Jaggi brothers for misusing Rs 977.75 crore in loans from PFC and IREDA. These funds, meant to purchase 6,400 electric vehicles for BluSmart Mobility, were diverted for personal luxuries, including a Rs 42.94 crore apartment and a Rs 26 lakh golf set. Only 4,704 vehicles were bought, leaving Rs 262.13 crore unaccounted for.

The scandal deepened when fake documents were submitted to credit rating agencies, leading to a “D” credit rating in March 2025. This triggered a multi-agency investigation, with PFC filing a complaint with the Delhi Police triggering a clear case of money laundering.

PFC and IREDA—government-backed NBFCs—loaned out massive sums without proper checks or balances. No red flags. No alarms. Just silence. Now that the mess is out in the open, regulators must ask tough questions about their role in this oversight failure.

The Gensol scandal is not just about one company. It exposes deep cracks in India’s public lending oversight system.

When taxpayer-backed money is funnelled into flashy pitches without due diligence, everyone loses—investors, regulators, and the public.

Sure, the ED, MCA, and NFRA are investigating, but if this ends with just a couple of scapegoats, we’ll have learnt nothing.

Valuation Woes: Look at Paytm—it raised a record Rs 18,300 crore in 2021, only to see its stock price crash by over 80%. Zomato and Policybazaar also saw their valuations plummet post-IPO. Critics argue that these inflated valuations were driven more by hype than solid fundamentals, leaving retail investors holding the bag.

Boardroom Blind Spots: Many startup boards resemble founder fan clubs rather than independent oversight bodies. This cosy setup often leads to rubber-stamp decisions and missed red flags, especially when key directors are former colleagues or close allies of the founders.

The Gensol saga should serve as a wake-up call. It’s time for real accountability, not just scapegoats. Flashy founders may come and go, but rebuilding public trust is a far more difficult task.

As investor scrutiny tightens and the era of easy funding fades, startups must prioritise transparency, independent governance, and sustainable growth. The question is: will the next wave of IPOs learn from these lessons—or repeat the same mistakes?

1. Airlines will have to reschedule all west-bound flights, especially those taking off from north India, with Pakistan shutting its airspace for Indian carriers on Thursday, two days after a terrorist attack in Jammu and Kashmir’s Pahalgam. As a result, airlines’ costs are bound to rise due to extended routes, potentially translating into higher airfares for passengers, Sesa Sen reports.

2. The Centre is considering a proposal to allow customers to directly contribute tips to the pension accounts of service staff such as waiters and drivers, reports Rishabh Bhatnagar. The scheme, currently at an ideation stage, aims to integrate informal gratuity into the formal social security system.

3. The SEBI is working on new systems to get alerts on bulk deal, pump and dump situations and their detection, tracking abnormal trading activity and more, Charu Singh reports. The work on this has been going on since the past year and there has been some development, they added. Furthermore, a central repository system is being worked upon to help.

4. The Central Board of Direct Taxes has rolled out an aggressive action plan for the fiscal 2025-26, aimed at tightening the net around black money and tax evasion, with a first-of-its-kind move to set an ambitious target of unearthing Rs 2.4 lakh crore in undisclosed income, people familiar with the matter tell me.

5. The government expanded the scope of tax on high-value purchases to track luxury spending and ensure that transactions above Rs 10 lakh are reported in income tax returns. The responsibility to collect the tax lies with the seller.

Union Minister Nitin Gadkari vows to replace vehicle horns with musical instrument sounds, Internet says will be stuck in music concert now.

Until next time, This is Shrimi signing off.