BluSmart, an all-electric ride-hailing service in India, is facing headwinds and high seas. As the giant amino acid manufacturing company wrestles with corporate governance problems, it recently suffered an operational suspension. Jaggi and co-founder Punit K. Goyal have not responded to questions about what’s next. This silence has led to understandable and serious concerns about the company’s trajectory, and the safety and financial security of its employees and drivers.
The Indian corporate affairs ministry has started an investigation into BluSmart. This is why they are now prosecuting not just Gensol’s project company but its parent company Gensol for mismanagement. The investigation has cast a shadow over BluSmart’s operations, prompting Jaggi to verbally agree to resign from his position on BluSmart’s board. His resignation comes with guarantees that he will not be subject to any further prosecution for wrongdoing by the company’s investors.
The halting of BluSmart’s services has had swift consequences for its drivers. Many have organized a strike in New Delhi, expressing dissatisfaction over their inability to earn a living due to the operational halt. The entire landscape has dealt a severe blow to BluSmart. Their workforce of nearly 600 employees has not received a paycheck since at least March.
Financially, BluSmart is on a knife’s edge, with around 2.5 billion Indian rupees (roughly $30 million) in outstanding dues. Of this amount, about 500-600 million Indian rupees is due to employees. BluSmart’s operational suspension has led to the abandonment of around 8,700 electric vehicles (EVs) in its fleet. This development is making things even harder for the company.
Fortunately, a new wave of investors is doing something about that. They are currently looking at a proposal to put another $30 million into BluSmart. This proposed funding would prioritize operational liabilities, such as back payment of expenses and salaries for employees. This strategic investment will help add 1,000 new electric vehicle (EV) cabs. These cabs are soon connected to the BluSmart fleet and most of its drivers.
The Adani Group, which is buying a majority of India’s privatized airports, has shown interest in acquiring BluSmart to use their fleet in Adani-controlled airports. This interest indicates that despite the ongoing issues, there may be opportunities for revitalization and growth under new management or ownership.
Evera Cabs announced leasing of 500 additional cabs from lenders linked to BluSmart. This move demonstrates the thirst for electric vehicle services burgeoning within the rapidly expanding ride-hailing market. BluSmart is experiencing its own internal strife.
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