Latest news with #BluSmart
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Business Standard
13-06-2025
- Business
- Business Standard
Gensol insolvency: NCLT admits Ireda's plea on ₹510 crore default
Gensol Engineering, which managed electric-car ride-hailing platform BluSmart, was admitted to the insolvency process on Friday following a plea by the Indian Renewable Development Agency (Ireda). Ireda had moved the National Company Law Tribunal's Ahmedabad Bench, citing a default of Rs 510 crore. The matter was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), which outlines the initiation of the Corporate Insolvency Resolution Process (CIRP) on a plea moved by a financial creditor or lender. A coram ('in the presence of') of Judicial Member Shammi Khan and Technical Member Sanjeev Kumar, however, said they were not appointing the resolution professional suggested by Ireda. Ireda's lawyer had urged the tribunal to make an appointment to look after the company, saying Gensol was 'headless' after its promoters allegedly were missing amid regulatory scrutiny. 'By virtue of Sebi's (Securities and Exchange Board of India) order, the company is now headless. Directors have walked out and the company has projects worth crores of rupees. Somebody needs to manage the show,' the lawyer told the Bench. The financial creditor also alleged a breakdown of internal controls and corporate governance norms at Gensol, accusing the promoters of running the listed firm as if it were their proprietary firm. BluSmart on April 16 had paused cab bookings in certain parts of Delhi-National Capital Region, Bengaluru, and Mumbai, the three cities where it operates. The rides were halted a day after Sebi debarred the promoters and directors of Gensol Engineering — Anmol Singh Jaggi and Puneet Singh Jaggi — from accessing the securities markets allegedly for fraudulent practices and funds.
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Business Standard
13-06-2025
- Business
- Business Standard
Gensol Engineering admitted to insolvency by NCLT on Ireda petition
The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted Gensol Engineering Limited to Corporate Insolvency Resolution Process (CIRP) on a petition filed by the Indian Renewable Energy Development Agency (Ireda). Earlier, the NCLT's Ahmedabad bench had approved a request from the Ministry of Corporate Affairs to freeze the assets, bank accounts, and lockers of Gensol Engineering and 37 related entities, following accusations of corporate fraud and mismanagement. The National Company Law Appellate Tribunal (NCLAT) has declined to unfreeze the assets, bank accounts, and lockers of Gensol Engineering and its associated entities. This follows an investigation by the Securities and Exchange Board of India (Sebi) into Gensol Engineering, a firm associated with BluSmart, which allegedly misused over ₹200 crore allocated for purchasing electric vehicles. Sebi has prohibited BluSmart promoters Anmol Singh Jaggi and Puneet Singh Jaggi from holding board positions and accessing the securities market, accusing them of diverting vehicle financing loans to real estate transactions. Sebi alleges ₹262 crore diverted from EV loan funds Sebi has alleged that around ₹262 crore -- part of the ₹978 crore in loans given to Gensol Engineering by Ireda and Power Finance Corporation (PFC) -- was misused. The funds were meant for the purchase of 6,400 electric vehicles (EVs) to be leased to BluSmart, but only 4,704 EVs were actually bought. According to Sebi, the money was routed through Go-Auto Pvt Ltd, Gensol's EV supplier, and diverted to companies controlled by the Jaggi brothers.
Economic Times
11-06-2025
- Business
- Economic Times
SP Group offers $3.4 billion NCDs to HNI investors amid market volatility
Mumbai: Wealth managers are offering Shapoorji Pallonji Group's latest $3.4 billion (₹28,500 crore) non-convertible debentures to high-net-worth individuals, but only to those willing to invest a minimum of ₹10 crore in the secondary market. ADVERTISEMENT A small portion of the debentures, originally placed with institutional investors at a yield of 19.75%, is being sold down to wealthy clients at yields of 18.0-18.5%, allowing distributors to pocket a spread of up to 175 basis points (1.75 percentage point). During group firm Goswami Infratech's ₹14,300 crore fundraising in 2023, the bonds saw secondary market volatility as smaller HNIs flipped their positions when market sentiment turned. At one point, the debentures originally issued at a yield of 18.75% were trading at as high as 22%, following a covenant breach and a fall in perception, even before any material credit deterioration. The latest NCD offering, being an unrated and unlisted tranche, comes with much less disclosure, information and compliance obligations compared to the previous, exchange-listed tranches."Last time, a lot of HNIs panicked and exited too quickly," said a wealth manager. "It spooked the market and distorted the credit story. This time, they have raised the bar to ₹10 crore, and they are filtering for patient capital."The group has also avoided a wide domestic HNI distribution this time. Wealth managers say the allocations to Indian individuals are a fraction of the ₹28,500 crore transaction. ADVERTISEMENT Experts have been concerned over affluent and mass-affluent segments getting into credit often without a full understanding of the risks. "Private credit is not for everyone," said Nachiket Naik, head of private credit Axis Asset Management. "Family offices come through funds that do deep diligence. But direct HNI participation, especially via digital platforms, is a different beast." Cases like BluSmart, an early-stage mobility platform that raised funds from HNIs via listed NCDs, have led to caution among investors. (You can now subscribe to our ETMarkets WhatsApp channel)
The Wire
05-06-2025
- Business
- The Wire
Lessons From the BluSmart Case: Why the RBI Must Act Now on Digital Wallets
Menu हिंदी తెలుగు اردو Home Politics Economy World Security Law Science Society Culture Editor's Pick Opinion Support independent journalism. Donate Now Government Lessons From the BluSmart Case: Why the RBI Must Act Now on Digital Wallets Sarthak Gupta 11 minutes ago The BluSmart incident reflects a clear regulatory gap in the manner in which the RBI has decided to govern the digital wallets. Reserve Bank of India. Photo: CC BY-SA 2.5, via Wikimedia Commons Real journalism holds power accountable Since 2015, The Wire has done just that. But we can continue only with your support. Contribute now Another Indian financial watchdog has found itself quietly drawn into the BluSmart saga —this time, it's the Reserve Bank of India (RBI). According to reports, last month, the RBI initiated consultations with stakeholders to assess the viability and regulatory framework of digital wallets. This comes in the wake of thousands of BluSmart users, who had preloaded funds into their BluSmart's digital wallet for booking airport and intra-city rides, suddenly finding themselves unable to use, withdraw, or transfer their money. It was only after significant public outcry that the company announced it would refund the money, though it would take at least three months for users to get their funds back. It's important to note that BluSmart is one of India's largest consumer-facing mobility companies. Had this happened with some smaller regional business – say, a local coffee chain – users might not have got even a chance to recover a single rupee. The business could have shut down overnight, leaving customers with little more than hope. The incident reflects a clear regulatory gap in the manner in which the RBI has decided to govern the digital wallets. Differential treatment In 2009, the RBI for the first time decided to regulate digital wallets in the country, and since then, it has broadly categorised digital wallets into two buckets – open system wallets and closed system wallets. The first one, i.e., open system wallet, allows users to make payments not just to the entity which has issued these wallets but also to certain third-party entities after users load them from their preferred payment option – debit card, netbanking, etc. For example, the Phone Pe Wallet (not to be confused with Phone Pe UPI). The user just needs to load the Phone Pe Wallet and then can use the same for services within their Phone Pe app, like mobile recharges or insurance purchases and also on other platforms such as Amazon for shopping or Zomato for food delivery. There are specific rules governing these open system wallets. For instance, all the money that is loaded by the user in the wallet is stored in an escrow account maintained in a bank, not with the wallet provider, ensuring the safety of funds. Like a debit and credit card transaction, there has to be two-factor authentication (2FA) for all transactions that happen through the wallet, preventing unauthorised payments. Any grievance of the user has to be resolved within a strict and definitive timeline of 30 days. Further, there are cybersecurity norms, transaction monitoring, and reporting obligations to the RBI. The second one, i.e., closed system wallets, allows users to make payments only to the entity that has issued the wallet after users load it. For instance, if you have a Myntra wallet, it can be used solely to purchase clothes and accessories from Myntra. As per the RBI, since 'these instruments cannot be used for payment or settlement for third-party services,' their issuance and operation do not require approval or supervision from any regulatory authority. It is worth noting that this was not always the case. In the initial years when the RBI began regulating such digital wallets in the country, it had imposed certain limits and reporting requirements on entities offering closed system wallets. However, the most recent regulatory framework—specifically the version issued in 2021 —does not impose any such obligations. Hence, as long as funds are circulated internally within the entity which has issued the wallet, such arrangements are not subject to regulatory oversight. The only document that governs the relationship between the wallet issuer and user is the terms and conditions prepared by the wallet issuer and accepted by the user. Users hardly have any bargaining power to get any change accepted in the standard terms and conditions. For instance, if you refer to Clause 10 of BluSmart's terms and conditions, it states that the company shall not be responsible for any unauthorised use of the user's e-wallet, credit card, debit card, or net banking account during or after availing the services on the application or website. This raises a critical question of fairness: Should a company that solely owns and operates the app or platform be allowed to disclaim liability for unauthorised payments made through its interface? While it can be argued that a user always has the option to approach a consumer court in case of any grievance, the practicality of this recourse is questionable. Consider the fact that the average transaction value for mobile wallets in India is almost just Rs. 450. Pursuing legal action for such small-ticket disputes is often disproportionate, akin to buying a 50-cent chicken but spending two dollars on spices. The light-touch approach of the RBI The RBI has emerged not just as a regulator but as a facilitator of innovation in the financial ecosystem in the recent years. It has allowed innovation, experimentation, and market-led development with minimal intervention. Just a few weeks back, Sanjay Malhotra, RBI governor, in his speech at the inauguration of Digital Payments Awareness Week, observed, 'We have adopted a soft-touch approach to regulating the payments ecosystem and FinTechs, and through these regulations, the Reserve Bank attempts to balance these divergent sets of expectations'. India's offline payment aggregation industry is one of the biggest examples of this approach. The RBI has allowed offline payment aggregators – companies that provide QR codes, sound boxes, or swipe machines and process payments to operate without specific licensing or compliance frameworks. This has allowed rapid expansion of low-cost digital payments in rural and semi-urban areas, through players like Paytm, BharatPe, etc. Just for reference of readers who are not familiar with the fintech industry – the counterpart of offline payment aggregators, i.e, online payment aggregators – a company that processes payments for online payment transactions has to follow one of India's rigid compliance frameworks. However, when a uniform approach is applied indiscriminately, it often causes more harm than good. That's exactly what happened during the period from 2018 to 2021, when the number of digital loan apps mushroomed across the country in the absence of any specific direction from the RBI. These apps simply partnered with any available Bank or NBFC and started disbursing loans with instant approvals. Result – there were cases of excessive interest rates being charged, misuse of phonebook access to harass defaulting borrowers (and their relatives), and even instances of photo-morphing using borrowers' phone galleries, and suicides. The situation became so murky that the Union government had to step in. The finance minister directed the RBI to prepare a whitelist of legitimate digital lending apps, and the Ministry of Electronics and IT also blocked access to several unlawful platforms. Eventually RBI had to bring the Guidelines on Digital Lending, 2022, to specifically regulate the digital lending industry. This guideline did not just prohibit data misuse, but also fettered access to data by digital lenders. RBI's 'light-touch' approach With the closed system wallet, the RBI seems to have taken the same 'light-touch' approach, keeping in mind that no low money laundering risk the closed loop wallet present. Funds can only be used within a specific ecosystem and cannot be transferred to other users, restricting the movement of funds and thereby reducing the risk of concealing illicit transactions. However, incidents like the Bluesmart case have highlighted that risks extend beyond just money laundering. While it is understandable that the RBI seeks to avoid overburdening the market with excessive regulation, it can instead lay down just foundational principle like defining ownership of users on the fund being loaded, until it is utilsed, accountability of closed loop wallet provider to resolve issues of customer, transparency by mandating disclosure by closed loop wallet provider of features of wallet – fund expiry, refund policy, reloadability, and usage restrictions etc at onboarding etc. Closed system wallets continue to be the industry's preferred model, largely due to low customer acquisition costs and the absence of KYC requirements. A principle-based framework, rather than a prescriptive compliance-heavy one, would strike a balanced approach, avoiding burdens like escrow maintenance or mandatory two-factor authentication, while still establishing essential rules that safeguard consumer interests and foster trust. Sarthak Gupta is a lawyer with a focus on technology law and Fintech. He is available on LinkedIn here. The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments. Make a contribution to Independent Journalism Related News The State of the Economy: India Inc's Profit Dips, Rupee Is Asia's Worst Performer Is RBI's New Plan for Bad Loans Just Another Quick Fix? India's Net Foreign Direct Investment Plummets by 96.5% to Reach Record Low RBI's Potential Record Dividend: Fiscal Relief or Long-Term Risk? 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India Today
30-05-2025
- Automotive
- India Today
Gensol misses May payment for loan on BluSmart cabs: Report
Gensol Engineering, promoted by two of the founders of electric mobility firm BluSmart, has missed a payment of about Rs 4 crore to its pass-through certificate (PTC) holders this month, reported The Economic Times (ET). The last successful repayment was made in April, said people familiar with the matter. Gensol had raised funds by issuing PTCs, which were offered to retail investors on the online platform Grip Invest. PTCs are loans given in exchange for an underlying asset, in this case, vehicles that run on the BluSmart loans were to be repaid using the cash earned by these electric cabs. But after BluSmart shut down its cab services and ongoing talks with Uber and other fleet operators failed to move ahead, repayments became Invest founder Nikhil Aggarwal confirmed the missed payment as quoted in the report. He said Gensol had raised a total of Rs 5.6 crore through the PTCs. So far, 56% of the principal has been repaid, but an amount of Rs 4.04 crore is still loans were secured against 76 electric vehicles. These vehicles are no longer in operation, as BluSmart has stopped its May 29, the Delhi High Court passed a final order, giving possession of these vehicles to the lessor, Vriksh Advisors, a subsidiary of Grip Invest. The court also allowed Vriksh to sell, operate or lease the vehicles. Aggarwal told ET that the vehicles have been inspected and found to be in good said Vriksh Advisors is now working on setting up charging stations and is in talks with fleet operators to re-deploy these vehicles on ride-sharing an industry insider pointed out that even if the vehicles begin running again, the terms of the original PTC agreement may change. He explained that revenues, commissions and pricing would differ on other platforms, and so the repayment plan would also need to be told ET that Vriksh Advisors is trying to find the best buyer or operator for the vehicles, in the hope that proceeds from the lease or sale will help repay the pending loan amounts.'People invested in BluSmart bonds and PTCs because they believed in the cab service, which had a good brand image, and they were also drawn by the high returns,' one investor told to a credit rating report issued by Care Edge Ratings on Tuesday, the bonds were issued in 2023, were due to mature in 2027, and offered a return of 13.6%.ET had earlier reported on April 21 that many BluSmart investors were expecting defaults on the bonds they had purchased through platforms like Yubi and Centricity. BluSmart had issued over Rs 100 crore worth of bonds over the past year. Of this, investors said that more than Rs 80 crore worth of non-convertible debentures (NCDs) are still due for troubles come as Gensol Engineering's promoters, brothers Anmol Singh Jaggi and Puneet Singh Jaggi, are under investigation. They are accused of diverting company funds for personal use. BluSmart has already stopped operations, and Gensol's bank accounts have been frozen following orders from the National Company Law Tribunal (NCLT) in Indian Renewable Energy Development Agency (Ireda), a government-run lender, said last week that it has moved the Debt Recovery Tribunal in Delhi against Gensol Engineering and its arm Gensol EV Lease, over a default of about Rs 729 crore. Ireda had earlier also filed an insolvency case against crisis began after market regulator Sebi launched a probe into Gensol Engineering following a stock manipulation complaint it received in June 2024. Sebi's investigation revealed that the Jaggi brothers had allegedly used loans meant for buying electric vehicles for personal In advertisement
