How BluSmart’s Closest Ally Became Its Biggest Risk

“In 10 years, everyone in India should be able to get a BluSmart

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BluSmart

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Sector

Travel Tech

Stage

Series B

Total Funding

$182.05 Mn+

EV cab within 5 minutes.” This is what Anmol Jaggi, cofounder of BluSmart — and chairman and MD of listed company Gensol Engineering — said in a press conference, as recently as February 2025. 

It’s only been a month, but the turnaround has been swift. Since then, publicly listed Gensol Engineering has come under the scanner due to debt and liquidity issues. And this controversy has also cast a shadow on BluSmart’s future. 

That’s because Gensol was BluSmart’s largest fleet supplier till last year, and in turn, BluSmart was Gensol’s largest customer. With Gensol now looking to raise INR 600 Cr to fix these issues, it also announced a stock split in the ratio of 1:10 (further drop in share price), even as its shares have plummeted over 60% since the beginning of March.

What exactly happened at Gensol that threatens to also consume BluSmart, one of India’s first EV-only ride-hailing startups? To start, let’s unpack the connection between the two companies, both founded by brothers Anmol Jaggi and Puneet Jaggi. 

The Gensol Connection

In January 2025, Gensol Engineering’s EV financing arm Gensol EV Lease Pvt Ltd sold around 3,000 EV cars, which were being operated by BluSmart, to a refrigerator company – Refex Industries’ wholly owned subsidiary — Refex Green Mobility. This acquisition was primarily done to bring down Gensol’s debt by INR 315 Cr.

Well, the acquisition seemed normal until, in March’s first week, credit agencies ICRA and CARE downgraded Gensol’s credit rating to D (default/junk) based on the feedback received from the company’s lenders about the ongoing delays in debt servicing.

Besides, ICRA accused Gensol Engineering of submitting falsified data and highlighted that BluSmart recently delayed payments for its non-convertible debentures (NCD), which can have an adverse impact on the “financial flexibility and capital raising ability” of Gensol Engineering. 

Consequently, the company’s shares have tanked and continue to free fall.

Amid these challenges, BluSmart decided to discontinue its Dubai operations from April 2025 as it has decided to focus only on the Indian market.

Sources also indicated there has been a top-level exodus in BluSmart, which was reported by The Morning Context this week. Chief executive officer Anirudh Arun, chief business officer Tushar Garg, chief technology officer Rishabh Sood, and vice president Priya Chakravarthy have all exited. Nandan Sharma, who was earlier a vice president, will take over as the chief executive officer. 

Even as Gensol Engineering tries to raise capital to beat its debt issues, there could be ramifications on BluSmart as well, given the business links between these two entities and its promoter group.

Gensol And BluSmart: Same Same, But Different

Founded by the brothers in 2007, Gensol Engineering primarily operates as an EPC (Engineering, procurement, and construction) company but things began changing sometime in 2018 as the company looked to diversify into the ride-hailing business. 

Sensing an opportunity to disrupt the space with electric vehicles, BluSmart began operating under the Gensol umbrella. 

Indeed, the company was incorporated as Gensol Mobility Private Limited in October 2018, before its name was changed a year later to Blu-Smart Mobility Private Limited. The three BluSmart subsidiaries also started life with the Gensol branding front and centre, before their names were also changed. 

Along the way, the Jaggi brothers brought Punit K Goyal – who had earlier founded solar energy company PLG Power and also sold two power plants in Gujarat and Maharashtra for $68 Mn and $56 Mn respectively – on board to helm the operations even as they held the majority of the company.

Of course, starting a ride-hailing business is relatively easier in the post-Uber world, as long as you have cash to burn to acquire users and have the right procurement chain in place for vehicles. 

BluSmart chose an asset-light model like Ola and Uber, which meant it didn’t want to purchase vehicles and operate them directly. Instead, the idea was to either lease a fleet or incentivise drivers who already were on electric vehicles.

For the former, Gensol Engineering became something of a knight in shining armour for BluSmart. The publicly listed company’s EV leasing business acquired EVs from OEMs such as Tata Motors, MG Motor and others, and dry leased them on a multi-year contract to BluSmart which essentially meant BluSmart operated the fleet, and Gensol did not take on any liability in this regard.

“When we started the ride-hailing business, it was initially named after the Gensol Group. As BluSmart grew into a strong, independent brand, it was decided during the initial days to rebrand it as BluSmart,” BluSmart told Inc42 in response to questions related to BluSmart’s origins within Gensol.

While BluSmart continues to say that neither Gensol nor any of its subsidiaries has any stake in BluSmart, Gensol’s annual report clearly shows that its promoters — the Jaggi brothers — and their families have significant influence on three of the subsidiaries that actually manage the ride-hailing operations. 

Inc42 asked BluSmart about the Gensol connection back in January 2023 when looking into the ties between the companies. At the time, we were told that BluSmart had signed a board-approved deal to lease vehicles from Gensol. 

“The only business relationship is between Gensol EV Leasing business which has leased out vehicles to BluSmart. This is a board approved transaction and audited for arm’s length from a Big 4 audit firm,” Anmol Singh Jaggi told Inc42 in an emailed response. 

Responding to our questions about the Gensol connection earlier this week, BluSmart denied that it was largely dependent on Gensol to continue scaling up the business. The company highlighted that it has multiple deals with leasing companies such as Orix, Kinto, Mahindra & Mahindra, among others. The statement also emphasised that in 2024, the majority of cars leased by BluSmart were from partners other than Gensol.

On the surface, this might be an accurate statement, but digging a little deeper, we find that at the very least the ownership of close to 3,000 vehicles was only recently transferred by Gensol to Refex.

This made up more than a third of BluSmart’s total fleet of 8,500, therefore, it’s not clear how diversified BluSmart’s fleet is despite what it says about having a number of OEMs on board.

How BluSmart Is Losing Its Edge

Incidentally, this is also a related party transaction as far as BluSmart is concerned. In January 2025, Gensol signed a deal with Chennai-based Refex Industries (founded in 2002) to transfer 2,997 electric vehicles from its books to Refex.

These vehicles continued to be leased to BluSmart, and Refex Industries also took over an existing loan facility amounting to nearly INR 315 Cr from Gensol Engineering, which comes as some respite for Gensol.

It is pertinent to note that Refex Industries managing director Anil Jain was an early investor in BluSmart and currently holds less than 1% equity in the EV-hailing company on a fully diluted basis. 

In an earnings call after the December 2024 results, Jain told analysts that the acquisition of the fleet will give Refex a long-term growth path, but despite persistent questions by analysts, the contours of the deal are unclear. 

Refex Industries will offer a long-term dry lease for five years to BluSmart, Jain claimed, but also added that the company could look at taking over this fleet and its operations in the future. 

It’s also not clear whether this deal is beneficial for BluSmart. The company declined to comment on total lease payments owed to Refex. 

What we do know is that with Gensol, BluSmart had an edge, which it has lost. 

BluSmart was not only a key customer for Gensol, but there is a clear affinity between the two companies. As per Gensol’s annual report for FY24, the company signed contracts worth INR 138.87 Cr with Blu-Smart Fleet Private Limited, INR 9.19 Cr with Blu-Smart Mobility Private Limited, and INR 27 Lakhs with Blu-Smart Tech Mobility Private Limited — all of which were disclosed as related party transactions. 

Even if the lease deal was ratified by auditors, this close association between Gensol and BluSmart does raise some questions about favourable deal-making.  

As for Refex Industries, it does have plans to lease electric vehicles to other service providers, which means BluSmart might not be a preferred customer for Refex in the future, leaving it with little leverage in getting the right leasing fees. 

Diversifying its fleet suppliers is key for BluSmart at this point in time. For instance, earlier this month, Refex partnered with Uber Green to deploy 1,000 cars by 2026, and this could grow to a larger deal in the future. 

“…And we being a B2B player for us will be encouraging more and more of these opportunities where we can acquire vehicles and give it to B2C operators so that our income, our revenues are fixed and we don’t lose or burn money,” Jain said in the earnings call. 

BluSmart’s Fundraising Blues 

While BluSmart’s fleet has continued to grow, and entered new cities like Mumbai and Dubai, one thing remained constant. Promoters group have continued to invest in the company in a significant way in every funding round that BluSmart has raised.

While an investor infusing capital in his own company shouldn’t be frowned upon, investing in a regular interval, without disclosing the amount that has been invested has indeed raised a few eyebrows, especially when the promoters are also the promoters of a publicly listed company. 

While the company is yet to file its annual return for FY24, the promoter groups’ stake comprises around 30% in the company, according to the company’s response to Inc42, with Anmol Jaggi being the single largest shareholder (non-institutional).

With both Anmol Jaggi and Puneet Jaggi under SEBI’s scanner because of poor credit ratings, things might get awkward for BluSmart when it comes to raising capital in the future. In fact, Inc42 reported earlier this year that BluSmart was indeed looking to raise $50 Mn in funding from VC funds and the promoter group. 

There is no confirmation or update on this particular funding round as yet.

Its other backers include BP Ventures, responsAbility Investments AG, Sumant Sinha, MS Dhoni Family Office, Survam Partners, Mayfield India Fund, 100Unicorns, JITO and Green Frontier Capital.

Besides, one thing has to be understood — BluSmart has raised over $80 Mn in debt from multiple investors, and a large part of any potential fundraise might go towards repaying this debt, considering it is a loss-making company. 

In fact, earlier this year, BluSmart delayed a tranche of INR 30 Cr, which it subsequently repaid belatedly. 

Ride-Hailing’s 2.0 Moment 

A fundraise is also critical for BluSmart to continue adding to its fleet. Currently, BluSmart claims that it has around 8,500 electric vehicles in its fleet. 

But in terms of overall fleet size, BluSmart trails Uber and Ola, even though it is estimated to have the largest EV-only fleet in India. 

The closest competitor for BluSmart is Uber Green, the ride-hailing giant’s EV business. It is targeting a fleet size of 25,000 EVs by 2026, and has already partnered with Lithium Urban, Everest Fleet, Moove, and even Refex Mobility Green to procure these cars. 

If we talk about Uber India’s overall four-wheeler taxis in the country, the number stands at around 5 Lakh. 

While OLA and Rapido both are yet to introduce a separate EV fleet, their respective fleet count stood at around 10 Lakh and 1 Lakh, respectively. 

Here’s a look at the major players:

BluSmart is yet to file its FY24 numbers. However, media reports suggest that the startup has closed FY24 with a gross income of INR 376 Cr compared to INR 160 Cr in FY23. For context, net revenue for FY23 was INR 70 Cr. 

According to him, BluSmart is for those consumers who seek comfort and don’t mind shelling out a premium for a cab ride. “We don’t want to build BluSmart for people who are finicky about INR 20 or INR 30. We want to focus more on India 1.0 – those living in Bengaluru and Delhi NCR,” Goyal was quoted as saying by The Arc.

But BluSmart is not exactly the most premium service in India currently. It also faces some competition from the recently reintroduced premium service Uber Black. Plus, the likes of Shoffr and Luxorides, which have a sharper focus on the premium segment, are more likely to extract high revenue in this category.

BluSmart also needs to improve on long wait times for cabs and poor customer support. 

While Uber and Ola long held a duopoly in the cab-hailing business, the rise of Rapido has caught them by surprise. Rapido is looking to raise a further round of INR 250 Cr to expand to 500 cities in India this year, after raising INR 1,000 Cr last year.

In the ride-hailing business, Rapido has clearly earned investor faith with its patient go-to-market strategy of two-wheelers first and then three-wheelers before entering the cab-hailing segment relatively later than the others. For instance, in FY24, the startup’s operating revenue jumped by 1.5X to INR 648 Cr, while it reduced its loss to INR 370 Cr. 

BluSmart has long threatened to disrupt the Uber-Ola duopoly, but if anything, its model is most likely to be disrupted by rivals that have a better operating leverage and more optimal balance of demand and supply.

In fact, as more and more Indians adopt electric vehicles, BluSmart is very likely to lose any positioning advantage it has accrued over these years. And then it becomes a game purely of scale and operating leverage.

This is why founder Anmol Jaggi’s dream of having a BluSmart arrive at your doorstep in five minutes by 2035 seems a bit too ambitious.

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Edited By Nikhil Subramaniam