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HomeOpinionNewsmaker of the WeekBluSmart was a clean mobility success story. Exposes corporate governance at India’s...

BluSmart was a clean mobility success story. Exposes corporate governance at India’s startups

For customers, BluSmart was a success story that impacted their daily lives. In sync with the government’s clean mobility push, it was a flaunt for green-conscious riders.

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New Delhi: Once hailed as the poster child of India’s green mobility dreams, BluSmart—the all-electric cab service that won hearts with its clean, quiet, and reliable rides—has now hit a screeching halt. The company has suspended its services in Mumbai, Bengaluru, and Delhi-NCR, leaving loyal users stunned, sparking a wave of speculation around its future.

What might be even more disheartening to customers is a possible partnership with cab service operator Uber, which essentially shrinks the ridehailing space in India. The San Francisco-based cab aggregator, according to reports, may use BluSmart cabs by rebranding them as Uber Green.

The Jaggi brothers—co-founder Anmol Singh Jaggi and his lesser-known but equally involved brother, Puneet Singh Jaggi—and their empire of green businesses is crumbling.

At the heart of the controversy is Gensol Engineering Ltd (GEL), the publicly listed company also owned by the Jaggi brothers. The Securities and Exchange Board of India (SEBI), Tuesday, issued an interim decision highlighting how Gensol Engineering’s assets were being routed to associated companies and utilised for unrelated purposes as if they were the founders’ “personal piggy bank”.

The markets regulator has banned Gensol Engineering and the Jaggi brothers from the securities market. The SEBI order on the company highlights misutilisation and diversion of funds. Gensol’s case has once again put the spotlight back on fragile corporate governance practices at India’s new-age startups. And that is why the Gensol-BluSmart nexus is ThePrint’s Newsmaker of the Week.

“The promoters were running a listed public company as if it were a proprietary firm,” SEBI said.

A planned stock split of Gensol’s shares has been delayed by SEBI, which has also prevented the promoters, Jaggi brothers, from serving as directors and from directly or indirectly purchasing, selling, or dealing in securities. Within six months, the market regulator will also designate a forensic auditor to examine the company’s and associated parties’ financial records.

A new business model

BluSmart adopted a new strategy by leasing its whole fleet from businesses, in contrast to the typical ride-hailing services that hire cars from individual drivers. Gensol was its vital provider, obtaining EVs through large loans from state-backed institutions such as the Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (IREDA). These loans, which came to a total of Rs 978 crore, were intended to finance BluSmart’s activities by buying 6,400 EVs.

But according to the SEBI investigation, just 4,704 cars were really purchased. The Jaggi brothers allegedly misappropriated the remaining monies, totalling about Rs 262 crore, for their own indulgences. A luxurious Rs 50 crore condominium in Gurugram’s The Camellias, golf equipment valued at Rs 26 lakh, and sizable gifts for family members were all part of their extravagant shopping spree.

The misuse of loan by Gensol to purchase BluSmart cabs is likely to make securing borrowings for startups difficult.

The SEBI probe found a “complete breakdown of internal controls and corporate governance norms” at Gensol. After discovering payment defaults and possible loan record manipulation, credit rating agencies CARE Ratings and ICRA reduced Gensol‘s investment rating to ‘D’.

The company’s stock, under pressure since February, fell from Rs 132.66 on 11 April to Rs 126.02 on 15 April. As of Thursday, it was at Rs 116.56, down 90 per cent from its 52-week high.

The electric cab service provider’s collapse has jeopardised the lives of thousands of drivers across India. Also stuck is customer money in BluSmart wallets.

The collapse of a company that positioned itself as a cleaner, more dependable alternative to the likes of Ola and Uber is a big blow to the customers often at the mercy of private transport.


Also read: SEBI charges against BluSmart won’t impact India’s EV transition drive—clean energy experts


The diversions

BluSmart, founded in 2019 by Anmol Jaggi, Puneet Jaggi, and Punit Goyal, started off as an EV fleet operator that listed rides on Uber before switching to its own app and hiring paid drivers. With the help of early investors such as Deepika Padukone and MS Dhoni, the business grew beyond Delhi-NCR to Bengaluru, Mumbai, and Dubai.

But there were issues with conflict of interest because of its strong financial ties to Gensol Engineering, also run by the Jaggi brothers.

Of the Rs 977.75 crore Gensol obtained in loans from IREDA and PFC between fiscal years 2022 and 2024, Rs 663.89 crore was designated for the purchase of electric vehicles. The company stated that it paid Rs 567.73 crore to Go-Auto Private Limited for 4,704 EVs. Funds sent to Go-Auto, however, were frequently diverted back to Gensol or to organisations associated with promoters Anmol and Puneet Jaggi, according to the SEBI order.

Notably, Wellray Solar Industries, a company with past ties to the Jaggis, received Rs 424.14 crore. From there, it disbursed Rs 246.07 crore to a number of connected companies, such as BluSmart, Capbridge Ventures, and Matrix Gas & Renewables. In a pre-IPO deal last month, Matrix, a Gensol group firm, collected Rs 350 crore to grow its green hydrogen and gas aggregation projects.

For lakhs of customers, unaware of the financial irregularities at the company, BluSmart was a success story that impacted their daily lives. It was in sync with the government’s clean mobility push. And a flaunt for green-conscious riders.

Parminder Singh, founder and CEO of Kampd—a communities platform focused on building AI-powered spaces—posted on X about the misfortunes of BluSmart on Wednesday. His elderly parents, he said, had an ‘unwavering’ trust in the cab service.

Several people have poured in praises for the cab service company, while many remain in disbelief.

For now, brakes have been applied on the clean, timely, non-smelly cabs. And the story of clean airport rides has changed forever.

(Edited by Prasanna Bachchhav)

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