India’s securities regulator launched an investigation on Tuesday into Gensol Engineering, alleging misuse of funds intended for the purchase of electric vehicles, which has also implicated award-winning ride-hailing startup BluSmart. Originally hailed as a promising rival to Uber in South Asia, BluSmart is closely associated with Gensol, as both companies share common founders.
According to an interim order issued by the Securities and Exchange Board of India (SEBI), Gensol Engineering received approximately 9.78 billion rupees ($114 million) in term loans from two government-affiliated lenders—the Indian Renewable Energy Development Agency and Power Finance Corporation. This financing was earmarked for acquiring about 6,400 electric vehicles to lease to BluSmart. However, SEBI found that the company only bought 4,704 EVs, spending around 5.68 billion rupees—significantly less than the amount sanctioned. The remaining fund, SEBI alleges, may have been improperly diverted towards unrelated expenses, including luxury real estate purchases and personal expenditures by Gensol’s promoters, Anmol Singh Jaggi and Puneet Singh Jaggi.
Acting swiftly, SEBI has barred both of the company’s promoters from holding key positions at Gensol or participating in the securities market during the course of the investigation. The regulator noted specifically that the Jaggi brothers used the public-listed entity as their own private vehicle, undermining corporate governance norms.
Anmol Singh Jaggi acknowledged the investigation, emphasizing that the company is fully cooperating with authorities and is currently compiling evidence to clarify its position. He described the regulator’s actions as interim and expressed confidence in a favorable resolution after a thorough review, stressing that his firm has always operated responsibly.
The controversy surrounding Gensol arrives on the heels of significant financial woes and strategic setbacks for BluSmart itself. The startup, which once envisaged an ambitious expansion both domestically and internationally, has already faced mounting losses and difficulty securing additional external investment. Recently, BluSmart discontinued its operations in Dubai and is reportedly considering a move to reposition itself as a fleet provider for its former competitor Uber, according to local press reports.
Originally established in 2018 as Gensol Mobility and then rebranded as BluSmart Mobility, the company initially operated as a fleet partner to Uber before venturing out on its own. BluSmart successfully attracted significant backing from prominent international investors, raising millions of dollars and rapidly expanding electric vehicle infrastructure in key Indian metro areas, including Delhi-NCR, Mumbai, and Bengaluru. As recently as early 2024, BluSmart secured $25 million from Swiss-based ResponsAbility Investments to bolster its EV charging infrastructure, but a larger funding round reportedly worth $100 million later fell through, contributing to the startup’s ongoing financial strain.
Despite ambitious plans announced last year to expand its EV fleet from around 6,000 vehicles to 10,000 by year-end, BluSmart has struggled to meet its growth targets. Recent turbulence surrounding its parent company has put further pressure on BluSmart as Gensol’s share price has plummeted more than 83% amid the unfolding crisis.
Gensol Engineering previously disputed allegations of default, insisting that the company remained compliant with its financial obligations. However, multiple credit rating agencies downgraded Gensol just over a month ago, citing persistent delays in debt repayments and poor corporate governance practices—a sign of broader scrutiny that now intensifies under regulatory investigation.
