How to spot the next Gensol before it’s too late

Subscribe to enjoy similar stories. If you’ve taken a ride in one of those blue-and-white BluSmart EVs at Delhi airport, you might not have guessed its link to a stock that’s been making headlines for all the wrong reasons. Gensol Engineering, tied to BluSmart through its common promoter Anmol Jaggi, has seen its stock crash nearly 80% from its peak amid allegations of falsified debt records.

Now, questions about corporate governance are in the spotlight. In February, months before rating agencies raised red flags, Gensol’s promoter offloaded ₹11.4 crore worth of stock. Interestingly, in October 2024, the promoters had bought the stock from the open market at a much higher price, although the total amount used to buy was significantly lower than amount sold.

For a sharp-eyed investor, these transactions could have hinted at trouble well before the market reacted. History has shown that insider selling, while not always a red flag, can be a crucial signal—just as it was in the infamous Enron collapse, where insiders cashed out over $1 billion before the company imploded. There is nothing illegal about insider buying or trading as long as it follows the rules laid out by regulators.

The insider information is available publicly and can help you get a good lead over other investors in shortlisting potential winners. Imagine you’re playing a competitive video game. Multiple routes lead to a hidden treasure, but experienced players already know the best paths.

If you could track their moves in real time, wouldn’t your chances of winning improve? The stock market works similarly. Insiders—company executives and key stakeholders—are like seasoned players who understand the game better than most. They know the company’s