BluSmart halts services after Sebi cracks down on Gensol promoters

Electric vehicle ride-hailing startup BluSmart has paused its services following an interim order by the Securities and Exchange Board of India (Sebi) that alleged financial misconduct by the promoters of Gensol Engineering—who also serve as BluSmart’s co-founders.

The order, issued on April 15, has disrupted operations and left users across multiple cities unable to access ride bookings through the app.

Several users in Delhi-NCR, Bengaluru, and Mumbai reported being unable to book rides. BluSmart also issued a notification to its users stating that bookings on the app were being temporarily suspended. The message added that refunds would be initiated within 90 days if services do not resume.

“We've decided to temporarily close bookings on the BluSmart app. We truly appreciate your support. While we strive to be back soon to serve you with the same warmth and smile, we will initiate a refund within the next 90 days if services do not resume before then,” the company wrote in an email to users, one of which was later shared on X.

The suspension comes in the wake of a failed attempt by BluSmart to secure ₹415 crore (approximately $50 million) in funding. Reports indicate that investor confidence was shaken due to the unfolding crisis at Gensol.

Founders Face Regulatory Heat

Anmol Singh Jaggi and Puneet Singh Jaggi, co-founders of BluSmart, are also directors at Gensol Engineering, a solar engineering company based in Ahmedabad. Sebi’s interim order has barred both brothers from accessing the securities market and from holding any leadership roles at Gensol.

“In compliance with Sebi’s directions in the interim order,” the company said, “they are no longer participating in the management of Gensol, as per Sebi’s instructions, effective immediately.”

The order follows an investigation by the market regulator, which alleged severe lapses in governance and misuse of corporate funds. Sebi stated that the promoters diverted company funds for personal luxury expenses, including a ₹26 lakh golf set and an upscale apartment at DLF Camellias in Gurugram.

The regulator described the misuse as treating the company like a "personal piggy bank".

Cab Services Disrupted

BluSmart began withdrawing its cab services from key areas following the Sebi directive. Passengers at Delhi Airport reported booking failures, prompting an advisory from the Delhi International Airport.

“Please note, BluSmart has temporarily suspended its operations at Delhi Airport. However, there are adequate cab and taxi services available...,” the advisory read.

The disruption extended to Gurgaon, New Delhi, Bengaluru, and Mumbai, where users experienced similar issues.

Earlier reports suggested that BluSmart was exploring a partnership with Uber and could potentially exit the ride-hailing market altogether.

Financial Struggles Mount

BluSmart has been grappling with rising operational costs, reportedly spending over ₹20 crore monthly to sustain its services. Without fresh capital and in light of its failed fundraising round, the company appears to be winding down.

Market experts believe the episode underscores broader challenges in India’s startup ecosystem.

Tarun Singh, Founder and Managing Director of Highbrow Securities, commented on the issue, saying, “The regulator uncovered fund diversion, corporate governance failures, and a brazen treatment of company money as the promoters’ piggy bank. Startups, especially in their early stages, operate in a regulatory grey area where oversight is minimal, and the line between personal and company finances is often blurred. Markets have a long memory when it comes to governance failures—this stain will linger long after the headlines fade, crushing both valuation and investor confidence.”

Meanwhile, Gensol has pledged full cooperation with the ongoing Sebi investigation. In a regulatory filing, the company stated it will provide “complete access to records and information to ensure a transparent and comprehensive audit process.”