Gensol, BluSmart's Tangled Fortunes: A $435 Million Puzzle in India's Cleantech Sector

BluSmart burst into the ride hailing market in India as a green answer to Uber and Ola—an all-electric ride-hailing startup built for scale. Founded in 2019 by serial entrepreneurs Anmol Singh Jaggi and Punit Goyal, it quickly amassed over $200 million in funding from investors like Venture Catalysts, Green Frontier and BP Ventures.

But behind its rapid expansion lay a deep financial link to Gensol Engineering, Jaggi’s solar EPC firm, which leased EVs to BluSmart.

Now, that partnership is under strain. Gensol’s liquidity crunch—triggered by credit downgrades, debt concerns, and allegations of financial misreporting—has investors worried about BluSmart’s future. Once an asset, Gensol has become a liability, raising governance red flags and threatening BluSmart’s ambitions, including its rumored IPO. With questions mounting over financial transparency and sustainability, the fate of one of India’s most promising EV startups is now tangled with Gensol’s precarious balance sheet.

The stock price of Gensol Engineering has been on a decline since the last two weeks, falling over 54% from Rs 517.40 to Rs 236.25 this month after repeatedly hitting lower circuits, including on Wednesday. Gensol is an engineering, procurement, and construction (EPC) services company for solar projects. The company is also involved in leasing electric vehicles.   

Gensol’s governance issues

The recent sell off in Gensol shares, which slashed its market capitalization to Rs 855 crore ($99.4 million), was triggered after rating agencies like CARE Ratings and ICRA downgraded the company’s borrowings to default as lenders flagged issues in debt repayments. ICRA even alleged that the company falsified its financial statements, a claim that Gensol denied.

The downgrade raised concerns about the company’s financials, also putting in spotlight a deal to sell its electric vehicle fleet to Refex Green Mobility, a transport solutions company. The deal involved Refex buying Gensol’s 2,997 electric cars and taking over the EPC firm’s Rs 315 crore loan.   

Role of BluSmart

BluSmart was co-founded by Anmol Singh Jaggi, who is also the chairman and managing director of Gensol.

The company has so far raised a total of $182.05 million while it is in the process to raise another $50 million with a pre-money valuation of $335 million.

BluSmart has a fleet of over 8,000 electric vehicles, which are largely sourced from Tata Motors and MG Motor. According to media reports, about two-thirds of BluSmart fleet comprises of electric vehicles leased from Gensol.

Also, media reports indicate that Gensol’s balance sheet was used to build the business of BluSmart, which is a privately owned company. In FY24, Gensol spent over Rs 500 crore to support BluSmart, which included Rs 148 crore loans to three Blu-Smart subsidiaries, according to a Mint report.

Impact on the ride hailing company

As both the companies, it seems, are highly dependent on each other, liquidity crunch in Gensol has the potential to spiral out to BluSmart as well, impacting the company’s operations and growth prospects.

According to a report by The Morning Context, BluSmart is shutting down its Dubai operations amid difficulties in raising funds and weak business in the city.

However, the company denied reports claiming that it was in talks to sell the business to Uber, calling the claims speculative and unfounded.

“As India’s leading EV ride-hailing and charging infrastructure platform, BluSmart remains focused on scaling operations, expanding its footprint, and advancing sustainable mobility,” it said in a statement.

Gensol allaying investor concerns

In order to offset liquidity concerns among the investors, Gensol has recently announced a fundraise of Rs 600 crore.

"This initiative, combined with the company’s ongoing divestments, including the sale of vehicles and the sale of a subsidiary, is expected to significantly improve Gensol’s debt-equity ratio, positioning it for long-term financial strength and resilience," it added.

In an investor call in February, the company had said that it had sufficient financial liquidity and access to working capital.

Road ahead for BluSmart

The interdependency of the two companies on each other has raised governance concerns among the investors. They are now calling for greater transparency in the two companies’ operations and a need for disclosing the terms of lease and financial agreements between them.

For BluSmart, it becomes all the more important to come clean from the matter, which has the potential to impact its plans to raise funding in future and go public in the next financial year, as it had told its investors recently.

However, the company’s Co-founder Punit K Goyal seems optimistic about the future. Claiming that the ride hailing firm has redefined mobility in India, he said in a LinkedIn post that BluSmart is clocking an annual recurring revenue (ARR) of $96 million, with a cumulative revenue of $150 million over the past four years.

“BluSmart has redefined mobility in India and will always be remembered as the poster boy of electric mobility in the country. We’ve worked tirelessly to build India’s most trusted mobility brand—and we remain committed to this journey,” he said.

“The road ahead is even more exciting!”