Beleaguered ride-hailing firm BluSmart eyes climate funds for reboot

BluSmart looking to restart operations next month

BluSmart, the all-electric ride-hailing firm, is in talks with two large-scale climate- and mobility-focused distress funds to revive operations, according to sources in the know. 

 

The funds have a legacy of turning around companies in the solar, wind, and electric-vehicle space.

 

“At BluSmart, the focus is on revival, so some large capital fund comes in. There are two large, clean-climate funds that are looking at BluSmart. They operate in the climate and mobility domain,” a source with direct knowledge of the matter said.

 

The source also said the two funds were larger than Eversource Capital, which reportedly is in talks to acquire BluSmart, in terms of size and investment offer. 

 

Reports say Eversource Capital has put in an offer ranging from ₹850 crore to ₹1,200 crore. The source added some investors at BluSmart were also willing to put more in the company.

 

According to market intelligence platform Tracxn, venture capital firm BP Ventures holds a 13.1 per cent stake in the company.

 

“One of the funds has been a large (business-to-business-to-consumer) B2B2C customer of BluSmart in Delhi. They have been using BluSmart’s service for two years and have a Indian Institute of Technology Delhi and the Indian Institutes of Management, Calcutta and Ahmedabad pedigree,” the source detailed. 

 

Some leading investment funds include Macquarie’s Green Investment Group; The Rise Fund by TPG; Climate Resilience, and Adaptation Finance & Technology Transfer Facility (CRAFT), backed by The Lightsmith Group; Brookfield Global Transition Fund; and Actis Long Life Infrastructure Fund.

 

The sources quoted above said BluSmart planned to resume its service next month.

 

“Over the next few weeks, the effort is to bring BluSmart back on track and start operations in May again,” another source said.

 

However, according to sources, any investment deal is contingent upon how soon Anmol Jaggi resigns from the firm. He is chairman of BluSmart’s board and the largest shareholder in the company with a 25.14 per cent.

 

The two brothers — Anmol Jaggi and Puneet Singh Jaggi — are the cofounders of BluSmart and promoters and directors of Gensol Engineering. In a recent order, the Securities and Exchange Board of India debarred them from accessing the securities markets for allegedly fraudulent practices and fund diversion. The market regulator also restricted them from holding key positions in any listed firm.

 

According to the person, given that BluSmart is aiming to restart operations next month, the company must sign an investment deal as soon as possible.

 

On April 16, BluSmart abruptly halted cab bookings in certain parts of the National Capital Region, Bengaluru, and Mumbai, the three geographies it operates in.

 

Even though the mobile application was available to download on Google Play Store, users couldn’t select time slots to complete ride-booking. 

Bumpy ride

 

15 April: Sebi issues interim order, bars brothers Anmol, Puneet Jaggi from accessing securities markets

16 April: BluSmart shuts ops in Delhi-NCR, Mumbai, Bengaluru 

19 April: PE firm Eversource Capital eyes investment in BluSmart

24 April: ED detains Puneet Jaggi, searches Gensol premises; Anmol Jaggi reportedly not in India