India’s Securities and Exchange Board (SEBI) has initiated an investigation into Gensol Engineering following allegations of improper use of electric vehicle loans. This scrutiny also extends to BluSmart, a ride-hailing firm linked to Gensol, which had previously emerged as a competitor to Uber in the South Asian market.
In a precautionary measure, SEBI has prohibited Gensol’s founders, Anmol Singh Jaggi and Puneet Singh Jaggi, from holding leadership roles or engaging in securities trading while the inquiry is ongoing. Both brothers are also co-founders of BluSmart Mobility.
Anmol Singh Jaggi has stated that the company is working closely with the regulator to compile relevant documents and maintain transparency. He insists that this move is merely procedural and expresses confidence that their position will soon be clarified. According to the interim order from SEBI, the Jaggi brothers have been accused of misappropriating significant loan amounts for personal expenditures, which allegedly included purchasing luxury properties outside New Delhi.
Gensol Engineering secured loans totalling ₹9.78 billion (approximately AUD 114 million) from the Indian Renewable Energy Development Agency and Power Finance Corporation, with ₹6.63 billion allocated for acquiring 6,400 electric vehicles (EVs) designated for BluSmart. However, the inquiry revealed that only 4,704 EVs, totalling ₹5.68 billion, were purchased, leading to claims that funds were diverted for non-financial purposes, including personal expenses and assisting private entities linked to the promoters.
While Gensol has refuted claims of failing to meet debt obligations, SEBI’s findings point to repeated defaults, reflecting poor corporate governance. The regulator has described the actions of the promoters as operating the publicly listed company akin to a private business.
This scrutiny comes amid concerns raised by credit-rating agencies about Gensol, which issued warnings regarding delayed debt service and governance issues, resulting in a downgrade for the firm.
In parallel, BluSmart has been facing financial challenges, including significant cash outflows and limited access to external funding. The startup has recently halted its service in Dubai, which had launched the previous year, as it reassesses its operations in India across key cities such as Delhi-NCR, Bengaluru, and Mumbai. Reports suggest that BluSmart may shift its strategy to serve as a fleet partner for Uber instead.
Established in late 2018, BluSmart began as a fleet operator for Uber before evolving into an all-electric competitor. The startup received a funding boost of $25 million from Switzerland-based ResponsAbility in January but had ambitions to secure up to $100 million later that year, which ultimately did not materialise.
BluSmart’s fleet comprised 6,000 EVs, including MG Motor SUVs and Tata Tigor sedans. Despite plans to expand to 10,000 EVs, the target was not achieved. Gensol’s stock has suffered immensely throughout the year, plummeting by over 83%, closing at ₹129 on Tuesday.
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