The financial and operational collapse of Gensol Engineering and its sister company, BluSmart, has caught the attention of regulators, investors, and the public alike. Once considered a promising startup in India's electric vehicle (EV) sector, BluSmart's sudden downfall is closely tied to alleged financial mismanagement at Gensol, the company that leased its EV fleet. Amid ongoing investigations and potential acquisitions, this article offers an in-depth look at the series of events that led to the crisis and the road ahead.
The Rise and Fall of BluSmart: India’s EV Mobility Dream
BluSmart was founded in January 2019 by Anmol Singh Jaggi, Punit K Goyal, and Puneet Singh Jaggi in Gurugram, India. With initial angel investments from high-profile investors such as Hero MotoCorp, Jito Angel Network, and the office of actress Deepika Padukone, BluSmart quickly positioned itself as a key player in India's green mobility landscape.
BluSmart's services included:
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Hourly rentals for EVs.
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In-app wallets for seamless payments.
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Tata Motors partnership for fleet expansion and Jio-BP collaboration to enhance charging infrastructure.
By 2023, the company had expanded to 5,000 EVs and 3,900 charging stations, with a reported annual revenue run rate of ₹400 crore. The company also launched operations in Bengaluru and raised significant funding, including ₹25 million from a Swiss climate finance firm, ResponsAbility, to further build its EV charging infrastructure.
However, despite its early successes, things started to unravel.
Gensol Engineering: The Parent Company’s Financial Troubles and Governance Issues
Gensol Engineering, the company founded and controlled by the Jaggi brothers, played a key role in BluSmart’s operations by leasing electric vehicles to the startup. Gensol secured loans worth ₹9.78 billion from public sector lenders like IREDA (Indian Renewable Energy Development Agency) and PFC (Power Finance Corporation) to purchase EVs.
These loans, intended for fleet expansion, came under scrutiny when it was revealed that a significant portion of the funds was misused:
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₹200 crore diverted through a car dealership to other companies linked to the promoters.
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Personal expenses, including the purchase of luxury apartments at DLF Camellias, were reportedly funded by misdirected loans.
The lack of proper financial controls and governance at Gensol led to significant concerns about its business practices.
SEBI’s Involvement: Allegations of Fund Diversion and Financial Mismanagement
On April 15, 2025, the Securities and Exchange Board of India (SEBI) issued an interim order detailing serious allegations against Gensol and its promoters, Anmol and Puneet Singh Jaggi. The order uncovered a web of financial mismanagement, including:
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Misuse of loan funds for personal expenses such as luxury real estate purchases.
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Lack of financial controls at Gensol, allowing the promoters to treat company funds as their personal piggy bank.
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Failure to follow corporate governance norms, leading to significant shareholder risks.
SEBI imposed a capital market ban on the Jaggi brothers, barring them from holding positions in listed companies. In response to the regulatory action, the Jaggi brothers resigned from their positions at Gensol, and the company’s stock split was put on hold.
The SEBI order revealed how the mismanagement of funds contributed directly to the downfall of BluSmart, as the latter’s fleet was largely owned by Gensol.
Impact on BluSmart: Service Suspension and Financial Collapse
As the financial troubles at Gensol intensified, BluSmart found itself unable to continue operations. On April 17, 2025, BluSmart announced that it would suspend bookings in key cities like Delhi-NCR, Mumbai, and Bengaluru due to its parent company’s financial instability. Customers were informed that refunds for unused ride credits would be processed within 90 days.
By April 18, 2025, several senior executives at BluSmart had resigned, signaling the deeper cracks within the company. The disruption of services also raised concerns about BluSmart's future, especially considering its previously strong reputation for offering reliable, eco-friendly transport options.
The Ministry of Corporate Affairs (MCA) Investigation: Potential Corporate Governance Violations
The Ministry of Corporate Affairs (MCA) is conducting a preliminary investigation into Gensol and BluSmart’s corporate governance practices. The MCA is focused on whether there were violations involving fund diversions for personal use, such as purchasing luxury apartments or transferring funds to entities owned by the promoters.
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Investigation Scope: The MCA is reviewing information in the public domain as well as additional reports received by the ministry.
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Potential Actions: The MCA’s decision on whether to formally investigate the companies or take further action is expected within a fortnight. If the investigation confirms governance violations, it could lead to more regulatory scrutiny.
Eversource Capital’s Acquisition Offer: A Glimmer of Hope for BluSmart
Amid the financial turmoil, Eversource Capital, a climate-focused investment platform, has reportedly stepped in with an offer to acquire BluSmart for ₹800-1,000 crore. This valuation represents a significant 60% drop from BluSmart’s last known valuation of ₹2,561 crore. Eversource plans to merge BluSmart with its portfolio company, Lithium Urban Technologies, which also operates in the electric vehicle space.
As part of the acquisition deal, Eversource is seeking the resignation of the Jaggi brothers from BluSmart’s board. This move comes after the regulatory issues tied to their management of both Gensol and BluSmart, with Eversource aiming to stabilize the operations and inject around $100 million into the combined entity.
While the deal offers a potential lifeline for BluSmart, it remains uncertain if it can fully recover from the damage caused by the regulatory scrutiny and the loss of consumer trust.
PFC and IREDA’s Next Steps: Auctioning Gensol’s EV Fleet
As the parent company of BluSmart struggles to stay afloat, PFC and IREDA, the public sector lenders that financed the electric vehicle fleet for Gensol, are reportedly preparing to auction off over 5,000 EVs leased to BluSmart. These vehicles were financed through loans worth ₹663 crore, but with BluSmart now inoperable, lease payments have stopped, and the lenders fear that the Gensol loan account could turn into a non-performing asset (NPA).
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Lender Concerns: Both PFC and IREDA are concerned about the possibility of the loans becoming NPAs and are looking for buyers to mitigate the financial risk.
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Debt-Service Reserve Account: While the lenders have so far avoided tagging the loan account as an NPA, this buffer could soon run out without further payments from BluSmart.
Given that the Jaggi brothers hold 62.65% of Gensol’s shares, with a significant portion pledged, the potential for further financial instability is high. Gensol's stock has already dropped by 84% since the start of the year, and over 70% of its market value was wiped out in under two weeks.
The Future of BluSmart and Gensol
The crisis surrounding BluSmart and Gensol raises serious questions about the future of both companies and their ability to recover from the regulatory and financial fallout. While Eversource’s acquisition offer presents a potential path forward for BluSmart, it faces considerable challenges:
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Restoring Customer Trust: BluSmart’s reputation for reliability has been severely damaged, and rebuilding consumer confidence may take time.
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Navigating Financial Uncertainty: Both companies must address their debt issues, particularly with lenders like PFC and IREDA, to avoid further financial consequences.
For the Jaggi brothers, the road ahead will depend on their ability to clear regulatory charges and restore credibility in the corporate world.
The Lessons from Gensol and BluSmart’s Downfall
The rise and fall of Gensol Engineering and BluSmart serve as a cautionary tale for entrepreneurs, investors, and regulators in emerging sectors like electric mobility. It underscores the importance of strong corporate governance, financial transparency, and adherence to business ethics. While the companies face significant hurdles, there may still be a path forward for BluSmart, provided the ongoing investigations and potential acquisitions result in a restructuring that prioritizes accountability and sustainability.
With inputs from agencies
Image Source: Multiple agencies
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