BluSmart Collapse: Fall of India’s EV Startup

Q: 1. What led to BluSmart’s operational shutdown?

BluSmart suspended its ride-hailing services in April 2025 following allegations by the Securities and Exchange Board of India (SEBI) against co-founders Anmol and Puneet Jaggi. SEBI’s investigation revealed that approximately ₹262 crore, intended for procuring electric vehicles, was diverted for personal expenditures, including luxury real estate and other non-business-related expenses. This financial misconduct led to a significant cash crunch, making it unsustainable for BluSmart to continue operations.

Q: 2. Are BluSmart employees and drivers receiving their pending payments?

As of late April 2025, many of BluSmart’s 500 employees have not received their March salaries. Although co-founder Anmol Jaggi assured that dues would be cleared by the end of April, there has been no confirmed update. Additionally, over 10,000 driver-partners are awaiting payment for their services, with some demanding compensation equivalent to three months’ income to mitigate the sudden loss of livelihood.

Q: 3. What actions have regulatory bodies taken against BluSmart and its founders?

SEBI has barred Anmol and Puneet Jaggi from holding key positions in any listed company and from accessing the securities market. Furthermore, a forensic audit has been initiated to investigate the extent of financial irregularities. Grant Thornton has been appointed to conduct this audit, focusing on tracing fund movements and assessing the company’s financial health.

Q: 4. Will customers receive refunds for their BluSmart wallet balances?

BluSmart has communicated to its customers that if services do not resume within 90 days, refunds for wallet balances will be processed. However, given the company’s current financial and operational challenges, there is uncertainty regarding the fulfillment of this promise.

Q: 5. What is the future outlook for BluSmart?

The future of BluSmart remains uncertain. The company is reportedly in discussions with potential investors, including private equity firm Eversource Capital, to sell a majority stake. However, the outcome of these negotiations and the company’s ability to restructure and resume operations depend on the findings of the ongoing forensic audit and regulatory investigations.

Author

Dhakchanamoorthy S

25 Apr 20255 minutes read

BluSmart Collapse: Fall of India’s EV Startup

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A Promising Start

The Cracks Begin to Show

Leadership Exodus and Operational Shutdown

Regulatory Actions and Investigations

Employee and Investor Fallout

Timeline of Key Events

Conclusion

BluSmart Mobility, once hailed as India’s pioneering all-electric ride-hailing service, has come to an abrupt halt. Launched in January 2019, the company quickly gained traction for its clean, reliable, and eco-friendly transportation solutions. However, a series of financial missteps and governance failures have led to its downfall, leaving employees, drivers, and investors in limbo.

A Promising Start

Founded by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit K Goyal, BluSmart aimed to revolutionise urban mobility with a fleet of electric vehicles (EVs). The company attracted significant investments, including backing from BP Ventures, and expanded its operations across major Indian cities like Delhi-NCR, Bengaluru, and Mumbai. By 2023, BluSmart boasted over 8,000 EVs and a 9% market share in New Delhi.

The Cracks Begin to Show

In early 2025, BluSmart defaulted on non-convertible debentures worth ₹30 crore, raising concerns about its financial health. This default was a significant red flag, especially for a company that had been perceived as financially sound.

Subsequently, the Securities and Exchange Board of India (SEBI) initiated an investigation into Gensol Engineering Ltd., a company closely linked to BluSmart and co-founded by the Jaggi brothers. SEBI’s findings were alarming: funds amounting to ₹262 crore, intended for procuring EVs, were allegedly diverted for personal expenses, including the purchase of a luxury apartment in Gurugram’s DLF Camellias and other lavish expenditures.

Leadership Exodus and Operational Shutdown

The financial irregularities led to a mass exodus of BluSmart’s top leadership, including the CEO, CBO, and CTO, in March 2025. Employees reported being instructed to work from home without formal communication, leading many to believe it was a prelude to termination.

On April 16, BluSmart suspended all ride-hailing operations and requested its 10,000 driver-partners to return their vehicles. This sudden move left drivers without income and clarity about their employment status.

Regulatory Actions and Investigations

SEBI barred the Jaggi brothers from accessing the securities market and holding key positions in Gensol Engineering. The Enforcement Directorate (ED) also detained Puneet Jaggi and is investigating potential money laundering activities linked to the misappropriated funds.

Additionally, the Institute of Chartered Accountants of India (ICAI) has initiated a review of Gensol and BluSmart’s financial statements for FY24, focusing on compliance with accounting standards and potential misconduct.

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Employee and Investor Fallout

Approximately 500 BluSmart employees have not received their March salaries, with no clear communication about future payments. The company had assured employees that dues would be cleared by the end of April, but as of now, there has been no update.

Investors, including BP Ventures, are closely monitoring the situation. BluSmart has appointed Grant Thornton to conduct a forensic audit to trace fund movements and assess financial health.

Timeline of Key Events

January 2019: BluSmart launched in Gurugram.
May 2022: Raised $25 million in funding.
May 2023: Secured an additional $42 million in funding.
February 2025: Defaulted on ₹30 crore NCDs.
March 2025: Top leadership resignations; employees instructed to work from home.
April 15, 2025: SEBI barred Jaggi brothers from the securities market.
April 16, 2025: BluSmart suspended operations; drivers asked to return vehicles.
April 23, 2025: Grant Thornton appointed for forensic audit.

Conclusion

BluSmart’s journey from a promising EV startup to a company embroiled in financial scandal serves as a cautionary tale about the importance of corporate governance and transparency. As investigations continue, stakeholders await clarity on the company’s future and potential avenues for recovery.

Reviewed by

Abhishek Saxena

A seasoned investment professional with over 17 years of experience in AIF and PMS operations, investments, and research analysis. Abhishek holds an Executive MBA from the Faculty of Management Studies, University of Delhi, and has deep expertise in securities analysis, portfolio management, financial analytics, reporting and derivatives.

Frequently Asked Questions

1. What led to BluSmart’s operational shutdown?

2. Are BluSmart employees and drivers receiving their pending payments?

3. What actions have regulatory bodies taken against BluSmart and its founders?

4. Will customers receive refunds for their BluSmart wallet balances?

5. What is the future outlook for BluSmart?

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Disclaimer: This information is for general information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing.