From EV Loans to Luxury Real Estate: BluSmart Scam Could Be India’s Biggest Startup Fraud

India’s electric mobility ambitions have been dealt a severe blow with the exposure of a massive financial fraud involving BluSmart, the country’s first all-electric ride-hailing service, and its principal financial backer, Gensol Engineering Ltd. What was once celebrated as a pioneering step toward sustainable urban transport has now become a cautionary tale for India’s burgeoning startup ecosystem.

What Is the BluSmart Scam?

BluSmart, which operated EV taxi services in Delhi-NCR and Bengaluru, heavily relied on electric vehicles leased from Gensol Engineering. Although the BluSmart app remains live on the Play Store, users are currently unable to book rides—no time slots or travel dates are available—effectively freezing the service for new bookings.

This suspension coincides with a damning interim order by the Securities and Exchange Board of India (SEBI), which reveals widespread financial irregularities and fund diversion by Anmol and Puneet Singh Jaggi, the promoter duo behind both Gensol and BluSmart.

SEBI’s Allegations: A Pattern of Diversion and Deceit

Between 2021 and 2024, Gensol Engineering secured ₹830 crore in loans from government-backed lenders like the Indian Renewable Energy Development Agency (IREDA) and the Power Finance Corporation (PFC). These funds were sanctioned to purchase 6,400 electric vehicles for leasing to BluSmart.

However, by February 2025, only 4,704 EVs had been procured at a cost of ₹568 crore, leaving a staggering ₹262 crore unaccounted for. SEBI alleges that this shortfall was siphoned off through a complex web of shell entities and layered transactions for personal enrichment.

Lavish Lifestyles Bankrolled by Public Funds

The investigation uncovered an array of extravagant personal expenditures funded through the misappropriated money:

• ₹43 crore was used to purchase a luxury apartment in Gurugram’s exclusive The Camellias, overlooking a golf course.

• ₹26 lakh was spent on a premium golf set from US-based TaylorMade.

• Over ₹11 crore was transferred to family members:

  • ₹6.2 crore to their mother

  • ₹2.99 crore to Anmol Jaggi’s wife

  • ₹1.86 crore for foreign currency purchases

Additional questionable payments included:

• ₹50 lakh to Third Unicorn Pvt Ltd, a company founded by Ashneer Grover

• ₹1.35 crore to BatX Energies, a lithium-ion battery recycling startup

• ₹17.28 lakh to Titan Company

• ₹11.75 lakh to DLF Homes

• ₹3 lakh to Make My Trip

Fabricated Disclosures and Investor Misinformation

SEBI’s probe revealed that Gensol:

• Falsified financial records to hide a loan default first recorded in December 2024.

• Submitted false “No Default” statements to credit rating agencies (CRAs), despite overdue repayments.

• Misled investors by claiming it had received pre-orders for 30,000 EVs during the Bharat Mobility Global Expo in January 2025. These supposed “orders” were merely non-binding MOUs with nine entities, lacking pricing or delivery terms.

Market Fallout and Regulatory Crackdown

In the wake of SEBI’s interim order:

• Anmol and Puneet Jaggi have been barred from accessing the securities market.

• Gensol’s stock price nosedived, falling 5% to ₹123 and hitting the lower circuit. The stock has plummeted 48% in the last month, and 84% since the beginning of 2025.

• Investor confidence has evaporated, triggering a mass exodus of shareholders.

BluSmart’s Future Hangs in the Balance

With Gensol under the regulatory lens and its vehicle leasing business disrupted, BluSmart’s future remains uncertain. Reports suggest the company may wind down its ride-hailing operations and pivot into a fleet partner role for Uber.

A Wake-Up Call for India’s Startup Ecosystem

The BluSmart-Gensol scandal is not just an isolated case of financial fraud—it represents one of the biggest recorded scams in India’s startup landscape. What’s more alarming is that public funds, meant to accelerate India’s green mobility goals, were allegedly diverted to bankroll luxury lifestyles and personal indulgences.

As the SEBI probe deepens, the case is likely to trigger more rigorous scrutiny of government-backed financing, related-party transactions, and investor disclosures. It also underscores the urgent need for stronger corporate governance mechanisms and accountability frameworks in India’s rapidly expanding startup ecosystem.