From green promise to crisis: BluSmart faces SEBI heat; Deepika Padukone, Dhoni, Ashneer Grover among high-profile investors
Electric ride-hailing startup BluSmart, once celebrated for its all-electric fleet and green business model, is now under regulatory scrutiny following allegations of financial misconduct. A recent Securities and Exchange Board of India (SEBI) investigation has revealed that co-founder Anmol Singh Jaggi misappropriated funds through an affiliate company and used money earmarked for electric vehicle procurement to purchase a luxury apartment.
The revelations have cast uncertainty over the startup’s operational future and raised concerns among its prominent investors.
BluSmart had attracted a star-studded lineup of early backers. Bollywood actor Deepika Padukone, cricketer MS Dhoni, Bajaj Capital’s Sanjiv Bajaj, and BharatPe founder Ashneer Grover were among the key investors. In 2019, Padukone’s family office participated in a $3 million angel funding round alongside Bajaj, JITO Angel Network, and Rajat Gupta.
Based on data from PrivateCircle, the Jaggi brothers collectively own almost 33% of BluSmart. BP Ventures, an investor in the Series A round, holds a stake of 14.3%. BluSmart characterized the $25 million Series A round as the largest of its kind in the mobility sector globally.
Dhoni’s and Deepika’s family offices have been instrumental in driving BluSmart’s financial growth, including a major investment round in July 2024, according to a report in NDTV Profit.
The company went on to raise $24 million in a pre-Series B round in 2024, drawing investment from Dhoni’s family office, ReNew Power CEO Sumant Sinha, and Swiss asset manager responsAbility Investments.
This round, which raised Rs 200 crore, also saw participation from Swiss impact investor ResponsAbility and ReNew Chairman Sumant Sinha. These investments underscore the confidence high-profile investors have in BluSmart’s trajectory despite recent challenges faced by Gensol Engineering, a closely linked entity.
This financial backing follows an initial angel funding round in 2019, where BluSmart raised $3 million, with contributions from Padukone’s family office, Ka Enterprises, as well as Bajaj Finserv’s Sanjiv Bajaj. The company has highlighted its “proven track record of company and promoter” and promises a “20%+ IRR potential post-tax” for its investors. Such claims are part of BluSmart’s broader strategy to expand its electric vehicle fleet and infrastructure across major Indian cities.
Ashneer Grover, reacting to the crisis, posted on X that he personally invested Rs 1.5 crore in BluSmart and Rs 25 lakh in Matrix. “I am the ‘victim’ of the current scenario… I hope the business can survive the current fiasco for the sake of its stakeholders,” he wrote.
The company now faces significant challenges due to the financial difficulties experienced by Gensol Engineering, whose debt rating was recently downgraded to default, precipitating an 80% drop in its market capitalisation within a month.
Gensol crisis
The financial turmoil at Gensol Engineering has had a ripple effect, leading to increased scrutiny by the Securities and Exchange Board of India (SEBI). As of December 31, public shareholders held a 37.4% stake in Gensol Engineering, a company that had delivered a robust 68% return after its mainboard listing, despite lukewarm Q3 results.
However, the tide turned sharply last month when a debt rating downgrade to default triggered a massive sell-off, wiping out nearly 80% of its market capitalisation in just 30 days.
The situation worsened after SEBI issued an interim order against Gensol’s promoters, spooking retail investors and casting a shadow over its close association with EV ride-hailing startup BluSmart. The regulatory action has already impacted BluSmart’s operations, with service disruptions reported in key cities.
While BluSmart is not a formal subsidiary of Gensol, the financial ties run deep. Transactions between Gensol and BluSmart’s subsidiaries exceeded Rs 148 crore, revealing a tightly knit relationship that has now come under intense scrutiny.
The electric cab company has temporarily halted operations in Delhi NCR, Mumbai, and Bengaluru. Customers attempting to request rides in electric vehicles were unable to do so at Delhi airport as well as in multiple areas of Delhi and Gurugram.
