Once hailed as a strong competitor to Uber in India, BluSmart — India's leading all-electric cab service — has seen its prospects nosedive, culminating in the suspension of new bookings.
The service, known for its fleet of over 8,000 electric vehicles and a reputation for reliable, courteous drivers, stood out in a market often plagued by erratic service and poorly maintained cars.
Its focus on superior ride quality at slightly higher prices made it a go-to option for users fed up with the inconsistency of more established platforms.
News of its apparent shutdown has triggered a wave of disappointment and frustration on social media platforms.
"As a frequent BluSmart user, the news of the service shutting down hits hard. Another service one got used to, lost to mismanagement," one user posted on X.
While many customers confirmed receiving refunds for unused balances stored in BluSmart’s digital wallets, others voiced concern over a waiting period of up to 90 days for their money.
This dramatic decline has left many wondering how a company that once attracted marquee international investors and consistently featured on top cleantech lists since its 2019 launch fell apart so suddenly.
The dramatic pause in operations across Delhi, Mumbai, and Bengaluru followed serious allegations from India’s securities watchdog, Sebi, which accused founders Anmol Singh Jaggi and Puneet Singh Jaggi of misappropriating funds — originally intended for vehicle leasing — to fund personal luxuries like upscale real estate and golf gear.
BluSmart has yet to comment publicly on the allegations or respond to media queries.
At the heart of the issue lies both suspected financial irregularities and a unique operational model that left BluSmart exposed. Unlike other ride-hailing apps that rely on self-employed drivers who own or lease their vehicles, BluSmart sourced its fleet via leasing arrangements with companies, most notably Gensol Engineering Limited (GEL) — a publicly traded firm also managed by the Jaggi brothers.
The cracks began to show last month when CARE Ratings and ICRA downgraded GEL’s creditworthiness, citing missed payments from BluSmart.
ICRA went further, highlighting feedback from GEL’s lenders pointing to delays in repaying loans and accusing the company of manipulating its financial disclosures — an act that raised red flags around its financial health and governance standards.
In a bid to stem the damage, GEL is reportedly offloading approximately 3,000 electric vehicles originally acquired for BluSmart, a move that could spell the end for the cab service’s operations.
Though the Jaggis have rejected the accusations made by the credit agencies, Sebi’s probe found the situation to be more serious than initially believed.
"What has been witnessed in the present matter is a complete breakdown of internal controls and corporate governance norms in Gensol, a listed company," Sebi said in a damning order. "The company's funds were routed to related parties and used for unconnected expenses, as if the company's funds were promoters' piggy bank."
Sebi noted that the alleged misuse of funds — tied to EV acquisitions for BluSmart — may have wider consequences, especially for public financial institutions like the Indian Renewable Energy Development Agency Ltd (IREDA), which had financed these vehicles.
Following regulatory orders, the Jaggis have exited the company’s board, and they are now barred from participating in stock market activities. This shake-up follows a wave of high-level resignations at BluSmart, including the departures of its CEO and CTO.
Investors have borne the brunt of the turmoil, with GEL’s stock plummeting nearly 90% over the past year, erasing substantial wealth in the process.
A corporate governance expert pointed out that the situation highlights a worrying trend in India’s start-up ecosystem, where governance lapses are all too common. He argued that while BluSmart was ultimately a casualty of the broader scandal, its business model may not have been viable in the long run due to continued financial losses, intensifying competition, and a slowdown in discretionary consumer spending.
GEL has announced plans to steady the ship by appointing a forensic auditor to scrutinise its books and those of affiliated firms. However, the future of BluSmart’s electric cab services remains uncertain.
