BluSmart Faces Major Setback After SEBI Cites Financial Irregularities

Ride-hailing operator BluSmart Mobility suspended services across major Indian cities Thursday after an interim order by the Securities and Exchange Board of India alleged financial improprieties at its leasing partner, Gensol Engineering.

SEBI’s April 15 order accused promoters of Gensol, including BluSmart co-founders Anmol Singh Jaggi and Puneet Singh Jaggi, of diverting more than Rs 200 crore in loan proceeds for personal use. The regulator said loans totaling Rs 978 crore, secured from government lenders IREDA and PFC, were routed through related entities rather than deployed for electric vehicle procurement.

Gensol Engineering, which owned and leased most of BluSmart’s EV fleet, confirmed receipt of the SEBI directive and said the Jaggi brothers had resigned from the board. Independent director Arun Menon also stepped down, citing the company’s deteriorating debt profile.

BluSmart, launched in January 2019 by Anmol Singh, Punit K. Goyal and Puneet Jaggi in Gurugram, grew rapidly on the promise of on-demand, zero-emission taxi rides. The startup attracted early backing from Hero MotoCorp, Jito Angel Network and celebrity investor Deepika Padukone, and later raised funds from Tata Motors, Jio-BP and Swiss climate investor ResponsAbility.

By late 2023, BluSmart operated about 5,000 electric cabs with 3,900 charging points, reporting an annual revenue run rate near Rs 400 crore. The company’s expansion included a 2022 launch in Bengaluru and plans to power its fleet with solar energy from Tata Power.

Operations began faltering in March when reports surfaced of talks with Uber for a potential acquisition. Service disruptions escalated after SEBI’s findings, with users in Delhi NCR, Mumbai and Bengaluru unable to book rides and receiving notifications of "temporary closure of bookings."

On Thursday, two additional BluSmart independent directors, Harsh Singh and Kuljit Singh Popli, resigned. The company warned customers that refunds for canceled trips would be processed within 90 days if services remain offline.

Industry analysts say the SEBI investigation and leadership exits could hamper BluSmart’s effort to re-establish trust in India’s electric mobility sector. Talks to pivot toward leasing its EV fleet to other operators now face uncertainty.