BluSmart’s revival plan hits roadblock as Uber pulls plug on EV deal: Report

Uber Technologies Inc has reportedly ended discussions with Gensol Engineering Ltd-backed BluSmart Mobility to transition about 5,000 electric vehicles (EVs) to its platform, dealing a fresh blow to the troubled EV ride-hailing startup.

The deal would have seen BluSmart operate as a fleet partner for Uber. However, Uber’s internal assessment reportedly flagged the steep depreciation of EVs as a risk not adequately reflected in BluSmart’s proposed pricing.

This marks the second aborted deal in as many months for the Anmol Jaggi-founded firm. In April, a ₹315-crore transaction to sell 2,997 cars to Refex Group also collapsed.

Concerns also emerged around the hypothecation of a large share of BluSmart’s fleet. Around 5,000 of BluSmart’s over 8,000 EVs were acquired by Gensol through loans from Power Finance Corporation (PFC) and the Indian Renewable Energy Development Agency (Ireda). These vehicles were then leased to BluSmart. Legal advice reportedly warned against the risk of sub-leasing such vehicles.

BluSmart operates an asset-light model, leasing cars from partners such as Gensol, Japanese financial services firm Orix, and Clime Finance, rather than owning its fleet directly.

The setback comes amid heightened scrutiny of both Gensol and BluSmart. The Securities and Exchange Board of India (SEBI) has barred brothers Anmol and Puneet Singh Jaggi, promoters of the two firms, from holding positions in listed entities, following allegations of loan fund misappropriation.

The Institute of Chartered Accountants of India (ICAI) is also reviewing the financial statements of Gensol and BluSmart for fiscal year 2023–24. The Financial Reporting Review Board (FRRB) expects to complete its review within six months, ICAI officials said.

Shares of crisis-hit Gensol Engineering extended their falling streak to the 17th straight day on Monday, tumbling 5 per cent, to hit a fresh lower circuit limit.

The stock declined 5.01% to 69.74-- its lowest trading permissible limit for the day as also a 52-week low -- on the NSE.