Sebi investigation into BluSmart likely to slow Uber's EV push in India

A regulatory investigation into financial mismanagement at BluSmart Mobility has thrown a wrench into Uber’s plans to deepen its electric vehicle (EV) push in India. The Securities and Exchange Board of India (Sebi) recently flagged fund diversion by BluSmart founders Anmol Singh Jaggi and Puneet Singh Jaggi, leading to an operational halt at the EV ride-hailing firm.

 

Uber, which had at one point considered acquiring BluSmart, is now pausing all engagements with the company, according to people familiar with the matter. The uncertainty has also slowed down Uber’s broader EV rollout in the country, which included plans to onboard roughly 8,000 BluSmart vehicles to its platform.

   

“A month ago, there were discussions between Uber and BluSmart executives about a possible acquisition, but those talks fell through,” said a person familiar with the matter. “But Uber recently was exploring a partnership to onboard BluSmart’s EV fleet. However, after Sebi’s findings, Uber is now likely to pause all engagements with the company,” he said.

 

Uber’s EV ambitions in India are focused on accelerating the shift to zero-emission mobility with a goal of electrifying every ride on its platform by 2040. The company plans to deploy 25,000 EVs on its platform over the next few years.

 

A query to Uber about the impact of the BluSmart controversy on its EV ambitions remained unanswered till the time of going to press.

 

The company is now likely to focus more on other fleet partners — Refex Green Mobility, Lithium Urban Technologies, Everest Fleet, and Moove — to support its EV ambitions.

 

The fallout has also left an estimated 10,000 BluSmart drivers out of work. Many worked in shifts using the same 8,000 cars. They may now seek opportunities with other ride-hailing platforms such as Uber, Rapido, and Ola.

 

BluSmart owns around 8,000 vehicles, and the Jaggi brothers may need to liquidate assets, including these cars, to repay investors. However, Uber is unlikely to be involved, as it doesn’t purchase vehicles but only onboards them to its platform, according to the sources.

 

“Sebi’s findings and BluSmart’s operational halt will have a serious impact on the viability and terms of any potential deal with Uber,” said Salman Waris, managing partner at TechLegis Advocates & Solicitors. If Uber proceeds, Waris said, the company will need to adopt an extremely cautious approach and likely renegotiate deal terms.

 

“The reputational risk and regulatory scrutiny will naturally cause Uber to pause or reassess its exposure,” said Sonam Chandwani, managing partner at law firm KS Legal & Associates, about Sebi's findings of fund diversion by the Jaggi brothers and BluSmart’s operational halt.

 

Chandwani said BluSmart’s collapse threatens to delay or dilute Uber’s EV ambitions in India. Given BluSmart’s reliance on Gensol Engineering for EV infrastructure and fleet, any operational paralysis risks Uber’s ability to scale up EV penetration under India’s FAME (faster adoption and manufacturing of hybrid and electric vehicles) policy and its own sustainability goals. Chandwani said Uber may now be compelled to explore alternative EV partners or in-house fleet models. This development might even lead to strategic tieups with OEMs (original equipment manufacturers) or state-backed EV initiatives, bypassing aggregator-dependent models.

 

Post-Sebi intervention and with Gensol under forensic audit, legal experts said any partnership or transaction with BluSmart now falls squarely within high-risk territory. The market regulator is empowered to pass directions in investor interest, including attachment of assets, which may make BluSmart’s valuation or acquisition commercially untenable.

 

Once rising stars in India’s clean energy sector, Gensol and BluSmart founders Anmol and Puneet now face regulatory heat, with Sebi barring them from the securities market.

   

The Jaggi brothers are accused of misusing ₹262 crore from a ₹977.75 crore EV loan. Sebi claims the funds were routed through complex transactions and spent on personal luxuries. These include a ₹42.94 crore apartment in DLF Camellias, a ₹50 lakh investment in Ashneer Grover’s Third Unicorn, a ₹26 lakh golf set, foreign currency purchases, and transfers to family members totalling over ₹11 crore.

 

BluSmart had also attracted investments from several high-profile individuals, including MS Dhoni, Deepika Padukone, Sanjeev Bajaj, and Ashneer Grover.

 

Grover, who invested ₹1.5 crore in BluSmart and ₹25 lakh in Matrix, which is part of Gensol, posted on X: “I am the ‘victim’ of the current scenario… I hope the business can survive the current fiasco for the sake of its stakeholders.” 

Number Plate 

> 25 mn: Trips completed since launch in ’19

> ₹790 cr: Annualised revenue run rate   > 1.8 mn: Number of riders  > 71%: BluSmart's market share in the EV cab segment, according to Traxcn

 

Gensol CXOs resign en masse

Hit with allegations of financial fraud and under the scanner of the market regulator Sebi, Gensol is witnessing the exit of its senior management. According to sources, C-suite managers have resigned from the company. 

  It is learnt that Chief Executive Officer (CEO) Shila Urhekar resigned from her position. Amit Kumar, who is the CEO for EV leasing business of Gensol, has also resigned.  

Both Urhekar and Kumar had not responded to the calls and text messages for comment at the time of going to press.

  Sources said the company’s chief human resource officer and other senior executives in the finance department had also exited the organisation. 

Over the last two days, all independent directors of Gensol have announced their exit from the board of the company. A company spokesperson did not respond to the development.