Eversource Intends to Acquire BluSmart of INR 800-1000 Crore

A media report claims that Eversource, a private equity firm, has made an offer to purchase BluSmart for between INR 800 and 1,000 crore. Eversource Capital is a climate-focused investment platform. If the purchase goes through, BluSmart's last known valuation of $300 million (about INR 2,561 crore) would be at least 60% lower. According to the media filings, Eversource intends to combine BluSmart with Lithium Urban Technologies, a company in its portfolio, and invest roughly $100 million in the resulting company.

Jaggi Brothers to Step-down

According to reports, Eversource wants Anmol Singh Jaggi and Puneet Singh Jaggi, co-founders of BluSmart, to resign from their positions on the board. Following their exclusion from the securities market by the Securities and Exchange Board of India (Sebi). This step was taken due to allegations of capital diversion and fraudulent activities conducted by the Jaggi brothers. Sebi accused the two of misusing money intended for the purchase of electric vehicles for their own personal expenses, such as buying a fancy flat. Following regulatory action, BluSmart suspended operations, causing thousands of drivers to lose their jobs and customers to express worries about ride credit refunds. The accusations of financial impropriety have also resulted in the resignation of other senior officials. Eversource Capital is a climate investing platform based in India that was established in 2018. It is a 50:50 joint venture between Lightsource BP, a worldwide solar energy producer based in the UK, and Everstone Capital, a private equity firm with operations in India and Southeast Asia.

Choosing Luxury Over Business Development

The Jaggi brothers' use of businesses under their control to divert funds was one of the most humiliating discoveries. Capbridge Ventures, a promoter-affiliated company, was used to channel INR 50 crore of a loan of INR 71.41 crore. From INR 50 crore, INR 42.94 crore was used to purchase an expensive flat in Gurugram's elite residential complex, The Camellias. Wellray Solar Industries, which is also connected to the promoters, received an additional INR 40 crore from another loan. It was very impossible to determine the money's actual destination because it was redirected among a number of different companies, including Gensol EV Lease, GoSolar Ventures, and BluSmart Mobility.

These deliberate actions were intended to obscure the audit trail and mislead investors, lenders, and regulators. Even more egregiously, Gensol claimed their loan accounts were in good standing in fake "Conduct Letters" that they sent to PFC and IREDA. After verifying, SEBI discovered that the agencies had not issued any such letters. Rating agencies ICRA and CARE downgraded Gensol's credit rating to "D", indicating high default risk and damaged confidence, because this not only broke regulatory standards but also amounted to open fraud.