How Gensol’s Loan Issues Dragged BluSmart Into Crisis

🚗⚡“You can’t disrupt a system while driving the same old engine.”

If this were a quote from a startup founder, it’d fit BluSmart perfectly. But it’s just what comes to mind when you trace the journey of India’s first all-electric ride-hailing company.

The New Kid on the EV Block

Back in 2019, when cab rides were synonymous with Ola and Uber, a couple of entrepreneurs decided to take a different route—literally. They launched BluSmart, a ride-hailing service with a green twist: no petrol, no diesel, just electric rides.

Now in 2025, BluSmart is doing more than just moving people around—it’s making headlines for big funding, bold expansions, and, well… a little regulatory drama.
So, what’s really happening behind those sleek, silent EVs?

The SEBI Order That Changed the Tone

Let’s start with the storm cloud.

Anmol Singh Jaggi, who founded both Gensol Engineering, a public company focused on solar energy and EV leasing, and BluSmart, a privately owned EV cab service.

But here’s where things get tricky. Gensol wasn’t just any EV leasing company. It secured government-backed loans from the Indian Renewable Energy Development Agency (IREDA) to purchase thousands of EVs, most of which ended up in BluSmart’s fleet. Essentially, government-backed money meant for Gensol indirectly fuelled BluSmart’s expansion. 

But there was another layer to this relationship. Gensol’s FY24 annual report disclosed contracts worth over ₹148 crores with BluSmart’s subsidiaries, raising questions about just how intertwined the two companies really were.

The problem? While BluSmart thrived, Gensol's public investors weren't directly benefiting because BluSmart wasn’t a Gensol subsidiary. It remained a separate private entity. Plus, Gensol wasn't exactly transparent about how much money was flowing into BluSmart.

BluSmart argued that all these deals were fair and independent, conducted at arm’s length and approved by the board. But with the companies closely tied, questions about corporate governance started to pop up.

The Financial Troubles Begin

As regulators started sniffing around, the financial cracks began to show.

By late 2024, Gensol had defaulted on loans worth ₹470 crores from IREDA. Credit agencies like CARE and ICRA downgraded its ratings to default, citing non-disclosures of key financials. That sent Gensol’s stock crashing and pushed the company into damage-control mode. By this time, Gensol's total borrowings had ballooned to over ₹1000 crore.

One such move? Selling off nearly 3,000 EVs to Refex Green Mobility to pare down debt. But when Refex backed out of the deal a few days ago, it sent both Gensol and BluSmart into a deeper spiral.

With Gensol now sidelined, BluSmart was left scrambling for alternatives. The fallout was immediate, with BluSmart abruptly suspending its services in Delhi-NCR, Bengaluru, and Mumbai. This left countless users stranded and triggered a wave of complaints regarding booking cancellations and the difficulty in obtaining refunds for their pre-loaded Blu Wallet balances.

Did BluSmart Get an Unfair Advantage All Along?

This brings us to a more uncomfortable question: Was BluSmart’s growth ever truly independent?

From FY21–FY24, Gensol borrowed nearly ₹978 crore from IREDA and PFC to buy EVs supposedly for BluSmart. But what was claimed doesn’t match what was delivered:

• What was claimed: ₹663 crore to buy 6,400 EVs
• What actually happened: Only 4,704 EVs were delivered (as per Go-Auto)
• Cost of these cars: ₹567 crore
• Amount paid to Go-Auto: ₹775 crore
• Unaccounted funds: ₹207 crore—still missing

Fake Letters & Hidden Defaults

• Gensol submitted fake "conduct letters" to credit rating agencies to show all was well.
• IREDA and PFC denied ever writing those letters.
• Real loan defaults were hidden for months.

SEBI’s Trail of Trouble

SEBI tracked how the money flowed to promoter-linked companies like:

• Capbridge Ventures LLP
• Gensol Ventures Pvt. Ltd.
• Matrix Gas & Renewables

And how was that money used?

• Buying a ₹43 crore luxury apartment in DLF
• Spending on personal luxuries:
  • ₹26 lakh on a luxury golf set
  • Over ₹1.86 crore in foreign currency (UAE Dirhams)
  • ₹17.28 lakh at Titan Company, likely for jewellery
  • ₹9.95 lakh for Anmol Singh Jaggi's ICICI Bank credit card bill
  • ₹36 lakh and ₹13 lakh on Puneet Singh Jaggi's American Express cards
  • ₹3 lakh for travel bookings at Make My Trip
• Transferring money to close relatives:
  • ₹6.20 crore to Anmol Singh Jaggi's mother, Jasminder Kaur
  • ₹2.98 crore to Anmol Singh Jaggi's wife, Mugdha Kaur Jaggi
  • ₹1.13 crore to Puneet Singh Jaggi's wife, Shalmali Kaur Jaggi
  • ₹87.52 lakh to Puneet Singh Jaggi's mother, Jasminder Kaur
• Investing in other ventures:
  • ₹50 lakh in Ashneer Grover's startup, Third Unicorn

The Fall From Grace: Struggling to Scale

With Gensol gone, BluSmart’s entire operating model began to look shaky.

Gensol had not just financed BluSmart’s EVs—it had also offered favourable leasing terms. Without that ally, BluSmart’s ability to scale took a direct hit. Their losses shot up to ₹470 crores in FY24, and customer complaints started to pile up. Adding to customer woes were increasing reports of poorly maintained vehicles within BluSmart's fleet, suggesting potential cost-cutting measures.

Further compounding their difficulties, reports emerged of key senior leaders, including the CEO, Chief Business Officer, and Chief Technology Officer, resigning from the company.

Yes, BluSmart claimed to have onboarded new partners like Orix, Kinto, and Mahindra & Mahindra. But considering over a third of its fleet had Gensol’s tag, the damage was done.

Enter Uber: The Drastic Pivot

The plot thickens with talks of a merger with Uber. According to recent reports, BluSmart is now exploring a drastic move: to exit its core ride-hailing service entirely. 

BluSmart, with its heavy financial burn (over ₹20 crore per month), is reportedly planning to transition its fleet to Uber, which will help both companies achieve synergy in the EV space.

According to sources, BluSmart’s shareholders have already approved this plan, and over the next few weeks, they’ll start moving about 700-800 cars to Uber’s platform.

Why is BluSmart making this move? 
The ride-hailing service that once promised a greener, more sustainable alternative to the traditional Uber and Ola options is now struggling to maintain a competitive edge.

BluSmart’s once-promising fleet of electric vehicles is shrinking, and it’s no longer able to scale as rapidly as its competitors. Their daily rides have dropped to 12,000 from 25,000-30,000 rides in peak in 2023.

The Cash Crunch and Bond Payment Default

In early February 2025, BluSmart Mobility defaulted on a ₹30 crore bond payment due to a cash crunch. Although the company eventually repaid the amount, this event triggered a “cross-default” situation, which forced the company to meet with debenture holders to reassure them of its future.

With mounting debt, internal governance issues, and increasing pressure from creditors, BluSmart is in survival mode. There’s no telling if this “pivot” to Uber is their lifeline or if it’s just delaying the inevitable.

The Price of Being the Face of Clean Mobility

Until recently, BluSmart was the darling of the clean mobility world.

• Government incentives? ✅
• ESG investors? ✅
• Sustainability press coverage? ✅

It ticked every “green future” box. It wasn’t just competing with Ola and Uber—it was offering a moral alternative.

But the higher you climb, the more brutal the descent when things go wrong.

Because this wasn’t just about a ride-hailing app—it was about trust.

And if SEBI’s allegations hold even partially true, it casts doubt over how funds have moved between Gensol and BluSmart, how independent their governance really is, and whether investor money has been used in ways that weren’t fully disclosed.

Is BluSmart’s Business Model Doomed?

Here’s the part most people don’t talk about.

Even without the regulatory heat, BluSmart’s business model was far from proven. In fact, it carried structural risks that now look even more dangerous.
Let’s unpack it.

1. Owns the Risk, Not the Fleet

Unlike Ola or Uber, which push operational and financial risk to drivers, BluSmart operates an asset-heavy backend. The cars are leased in bulk, the charging infra is built and maintained by them, and drivers are salaried or contracted—not gig workers.

That means:

• Fixed costs every month
• Maintenance liability
• Capital expenditure for charging stations

2. Zero Surge, Zero Cancellation, But Also… Zero Profits?

• BluSmart proudly markets its “no surge, no cancellation” policy. But those rider-friendly features don’t come free.
• They likely burn cash on every ride, subsidizing customer experience to stay competitive while Ola and Uber price dynamically.
• The revenue may have jumped from ₹71 crore in FY23 to over ₹171.81 crore in FY24—but at what cost?
• In a model with thin margins, rising EV costs, and heavy infra capex, growth doesn’t guarantee sustainability.

3. Intertwined Entities = Blurred Governance
This is where the SEBI issue becomes more than just a footnote.

• BluSmart and Gensol shared directors, office space, and service agreements.
• Some employees have had roles across both entities.
• EV procurement and infrastructure setup involved Gensol contracts, raising obvious conflict-of-interest concerns.

If these aren’t red flags, they’re at least yellow blinking lights on a dark highway.

The Fundraising Facade

And yet, investors kept pouring money.

In late 2024, BluSmart raised $24 million from existing shareholders, bringing its total raise to over $75 million. These included strategic investors like BP Ventures (yes, the British Petroleum guys)

But here’s the kicker: even while the company projected confidence and expansion plans, it had been in the red every single year. And now, with SEBI hovering and investor trust shaken, its future funding prospects might be compromised.

Also notable—no major institutional investor has come forward to defend the company publicly since the SEBI action. That silence? Telling.

Dubai Dreams & Reality Checks

In early 2025, BluSmart began teasing its international expansion—starting with Dubai.

The idea was to replicate the India model in a wealthier market with stronger EV infra. But let’s face it: if you’re facing governance scrutiny at home, scaling abroad isn’t ambition—it’s distraction.

And when your co-founder is banned by SEBI, announcing overseas expansion starts to feel like an attempt to change the narrative.

So… Is This the Beginning of the End?

Not necessarily. But it’s definitely the end of BluSmart’s clean image. BluSmart had a story we all wanted to believe.

Clean rides. Empowered drivers. Transparent pricing. ESG compliance. But good intentions don’t shield bad governance.

BluSmart’s troubles are not limited to financial woes. The company’s troubled relationship with its leasing partners, a series of governance issues with its parent company Gensol, and now a cash crunch that led to bond defaults all point to a deeper, systemic problem. The dream of an EV-powered, sustainable ride-hailing company seems to be slipping away.

The Uber merger, which initially looked like a promising move to scale and innovate, may be the only way BluSmart can survive — but at what cost?

For now, BluSmart’s future remains uncertain, and it is still unclear whether the merger with Uber will prevent it from sinking deeper into crisis.

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