Gensol Engineering’s Debt Crisis: How It’s Impacting BluSmart and India’s EV Sector

Just months ago, Gensol Engineering Ltd. became a symbol of India’s clean-tech ambition. The company founded by brothers Anmol and puneet jaggi—grew from a solar consulting organization to an incorporated clean energy player offering EPC (engineering, procurement, and construction) services and leasing electric-powered vehicles to rising and emerging startups like BluSmart. But in March 2024, the business enterprise's fortunes took a dramatic flip. Credit score companies ICRA and CARE downgraded Gensol to ‘default status’, bringing up delayed debt payments and issues over financial practices.

Since then, its stock has plummeted over 60%, and governance issues have rattled investor sentiment and confidence. The ripple effect has also presented the resulting effects on  BluSmart, a once-promising electric mobility startup that was closely reliant on Gensol’s EV leasing driving support. 

Understanding Gensol’s Business Model

Gensol Engineering began as a solar consultancy in 2012 and diversified into:

1.  Solar EPC Services:

• Gensol provided engineering, procurement, and construction services for solar power plants across India and Southeast Asia.

  
  

• This segment formed the company’s core revenue driver in its early years.

2.  EV Leasing & Fleet Management:

• Under its subsidiary Gensol EV Lease Pvt. Ltd., the company shifted focus to EV leasing.

  
  

• The strategy: purchase electric vehicles (mostly Tata Tigor EVs and MG ZS EVs) and lease them to ride-hailing startups like BluSmart.

3.  Electric Mobility Solutions:

• Gensol also aimed to become a full-stack EV service provider as per their planned vision and setting up EV charging stations, managing fleets, and integrating tech-driven fleet intelligence.

This business model was capital-intensive. Gensol borrowed heavily to finance the EV fleet expansion—₹1,146 crore of debt by early 2024, as per the provided sources.

But cracks began to show when the company struggled to generate enough operating cash to service these liabilities.

The Gensol-BluSmart Web 

Gensol and BluSmart are both run by Anmol Singh Jaggi and his brother Puneet Jaggi. While Gensol is a publicly listed solar engineering firm, BluSmart is a private electric cab startup. Despite having no official ownership stake in BluSmart, Gensol became its biggest financial backer: 

Gensol used government loans (e.g., from IREDA) to buy electric cars, which were leased to BluSmart. 

By 2024, Gensol had lent ₹500+ crore to BluSmart’s subsidiaries, creating a risky financial dependency.

Gensol Engineering's Financial Troubles

The trouble began when credit rating agencies ICRA and CARE downgraded Gensol’s ratings to 'default' status, alleging inconsistencies in its debt repayment documentation. Significant unpaid loans, particularly towards the Indian Renewable Energy Development Agency (IREDA), in terms of further strained its liquidity. These challenges have triggered a sequence of negative events; Gensol is compelled to take drastic measures, such as selling off assets, including an agreement to sell 2,997 EVs to Refex Industries, which has recently been canceled.

To ease its debt burden, Gensol tried to sell 2,997 electric vehicles to Refex Green Mobility and transfer a ₹315 crore loan. But Refex backed out at the last-minute moment, leaving the green energy Gensol stuck with unpaid debts and BluSmart scrambling to keep its cabs running. 

BluSmart’s Downward Spiral

Gensol’s collapse triggered and resulted in a domino effect on BluSmart: 

• Leadership Exodus: BluSmart’s CEO, CBO, CTO, and VP quit in March 2024 amid rumors of a failed Uber buyout. 

  
  

• Dubai Shutdown: BluSmart closed its Dubai operations due to poor demand and funding shortages. 

  
  

• Mounting Losses: The company reported ₹215 crore in losses in FY23, with riders complaining of long wait times and poor service.  

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Well, if we look closely the Red Flags were always there:

• Escalating Debt Levels: Gensol’s alarming debt load over ₹1,146 crores versus relatively low reserves of approximately ₹589 crores sends up red flags about its financial health.

  
  

• Promoter Pledging: With about 82% of promoter shares pledged, the company's vulnerability to stock price fluctuations significantly increases. This heavy reliance on pledged collateral can instigate further declines when lendable securities are hit, as lenders demand more security or initiate sales.

  
  

• Revenue dependency on Blusmart was unusually high.

  
  

• Cash flows were inconsistent despite growing topline numbers.

  
  

• The company had moved from SME Platform to mainboard only recently, with limited public scrutiny. 

  
  

But the market ignored it — blinded by growth stories and green energy buzzwords.

 What Lies Ahead for Gensol and BluSmart?

Gensol’s Moves:

• The company has announced a recent corporate event of stock split (1:10), possibly to improve liquidity.

  
  

• It is trying to raise ₹600 crore to repay debt and stabilize its operations.

  
  

But investor sentiment remains weak. Its stock has yet to recover substantially to gain the positive sentiment back and meaningfully.

Conclusion: A Wake-Up Call for India’s Clean-Tech Ecosystem

The pressing question for Gensol Engineering now is: where do they go from here? Not only must they demonstrate that they can consistently meet debt obligations, but Gensol also needs to deliver tangible profitability growth. Relying on the potential earnings from a sizable order book alone is insufficient if those orders do not convert into actual revenue.

Moreover, the promoters must act decisively to reduce pledged shares or invest additional capital, which would serve to enhance their credibility with existing and potential investors.

Only time will tell whether Gensol can reverse its fortunes, but the lesson to be learned by all market participants is clear: when a company’s numbers and the accompanying narrative do not align, exercising caution is essential. 

The crisis unfolding at Gensol Engineering and its ripple effect on BluSmart is not just a company-specific issue—it’s a reflection of the growing pains of India’s EV revolution.

It’s a reminder that rapid scaling without financial discipline, opaque governance, and conflict-ridden promoter structures can be disastrous, even in high-growth sectors like clean mobility.

As India eyes a green future, ensuring stronger due diligence, investor protection, and transparency needed that sustains the EV ecosystem.