Daybreak - Blusmart’s unfair advantage has now become its biggest roadblock

Episode Date: March 28, 2025

In this episode we fill you in on three standout stories from the past week. First, we talk about the unravelling of Blusmart, India's first EV ride hailing platform; Next, the private banking and wealth management boom in India; And finally how India’s ad agencies got raided over alleged price-fixing three days before country’s biggest marketing event, the IPL.Check out the stories and podcasts mentioned in this episode: Everyone’s looking for a private banker. Have you seen one?An IPL Whodunit 

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Hello and welcome to daybreak. I'm Snickda and I'm Rahel. And in this episode, we'll be talking about the unraveling of ride hailing platform Blue Smart, the private banking and wealth management boom in India. And finally, how India's ad agencies got raided over less, legit price-fixing three days before the country's biggest marketing event, the IPL.

Back in 2019 when it was launched, Blue Smart Mobility did the unthinkable. It took on the OLA-Ur-Ur-Boopoly headfirst by breaking all the rules in the Rite Healing Playbook. First, this homegrown startup decided to have an entirely electric fleet. Then it ditched the usual aggregator model and opted for the full-stack approach, where it chose to lease all of its vehicles directly. Add to that zero cancellations and no search pricing and you have a sure-shot disruptor. And disrupted did.

In many ways, it redefined urban mobility in India and paved the way for a bunch of newer players to enter the scene. But today, the environmentally conscious commuter's favourite airport taxi is in some serious trouble. I'm resisting the urge to use a driving pun and say that Blue Smart has hit a bump on the road because that would be a massive understatement. The first sign of trouble emerged

when the company decided to shut down its Dubai operations earlier this month. Then reports suggested that Uber had entered early discussions to acquire the company, a claim that Blue Smart has categorically denied. But in the middle of all of this, top executives started to resign one after the other. This week, multiple news organizations,

reported that the company's CEO, Anirud Arun, chief business officer Tushar Garg, CTO Rishab Sud, and VP of Experience Priyanka Chakravarti have all stepped down. This exodus started soon after Blue Smart announced that it was restructuring its operations, a rather vague statement made by many companies when they run into hard times financially. In Blue Smart's case, a big part of this puzzle is Gensol engineering, its parent company. Now, the Blue Smart Gensoll relationship is very game of Thrones. One of the founders of Blue Smart, Unmol Singh Jaggi, is also the chairman and managing director of 12-year-old Jensol,

which is a listed company that builds solar farms and leases out electric cars. And the connection doesn't just end there. A majority of the 8,000 cars in Blue Smart's fleet are leased from Gensol. Gensol's EVs actually account for about two-thirds of its fleet. And it makes sense. right? One company needs EVs, one has them in abundance. It's the perfect synergy. Except, we all know that there is a flip side to over-dependence. And that's exactly what is playing out now with Blue Smart and Gensol. You see, Gensol has been going through a rough time

financially. Recently, two rating agencies downgraded its credit rating. Not only was it accused of delayed debt payments, one rating agency also alleged it had falsified documents. So naturally, that sent its stock on a tailspin. The company was stuck between a rock and a hard place. It desperately needed liquidity. So what does it decide to do? Wind down its existing lease arrangements. Simply put, it decided to sell thousands of EVs.

The catch here is that the nearly 3,000 EVs it is selling to Chennai-based Refax Green Mobility represent 34% of Blue Smart's total fleet. Eventually, the deal is reportedly. that Refex will lease these cars back to Blue Smart. But the transaction is still pending regulatory approvals. The company insists that these operational restructuring decisions won't impact its ride-hailing services. But that only time will tell.

You see, a revision in the leasing terms to bring them in line with the rest of the market would mean a significant increase in costs. So far, Blue Smart has been paying less than what Gensol's other customers have to lease its cars. but now it will be brought in line with the rest of the market. And that will cut deep, especially considering Blue Smart's losses have widened considerably year-on-year. The bottom line is, the Blue Smart-Germard-Gensol relationship may have served the ride-haling app well in its early years,

but now it is proving costly for both companies involved. Sure, it's perfectly fine for a listed company to do business with an entity. It has a stake-in or a firm owned by the promoters. But ideally, transactions between... them should be at an arm's length, meaning the two related parties should deal with each other as they would with unrelated ones. That is, the terms should be such that each entity protects its own interest and that of all of its shareholders.

To survive, it is imperative for Blue Smart and Gensol to restructure their partnership. And that will mean Blue Smart raising more capital and Gensol diversifying its client base. Coming up next, how it's time for private bankers and wealth management. to shine in India. Last year, India minted a new billionaire every five days. This is according to here in India's rich list. We have more than 300 of them and counting as of now. And by next year, our country is expected to have more than one and a half million millionaires.

Now, all of these ultra high net worth individuals are looking for trustworthy, personalized and high quality investment and asset management advice from professionals. Which is why India has suddenly popped up on the radar of wealth management companies from around the world. The likes of UBS group HSBC are all lining up and Indian lenders are not far behind either. HGFC, ICICI, Indyc, Indyc have all been working on expanding their private banking offerings. My colleague Ron Up Kumar Gunjin spoke to two private bankers, one who works with Citibank, now merged with Access Bank and another from HHISBank. and another from HSBC. Both told him that private bankers have never been in so much demand.

They told him how back in the day, private banking was mostly a thing for foreign banks. So in terms of career growth, the job was pretty limited. People would suggest moving to retail banking instead. But now everybody is after private bankers, and they are paying really, really well, way more than regular banking jobs. But if you think private bankers can take it easy because they are in, in demand, well, you're not quite right. Because to get good business, they need to build trust. And building trust doesn't just mean giving great financial advice. It also means being accessible

anytime and anywhere and also catering to the whims and fancies of the rich. Like one of the bankers told Ronuk how he received frantic calls from his client at 3am one night because they had some doubts about their money and wanted the banker to resolve them immediately. And the expectations do not stop there. In one instance, a wealth manager told my colleague Noha how he had to arrange concert tickets for his client. Another had to use their contacts to pre-book a luxury car for their client. The banker also explained to Ronak how they have to keep an eye on global markets based on where their client has investments. And that means when a market opens in a certain country, they have to be awake and ready. On top of that, there are long meetings with senior private bankers, business

heads and colleagues to discuss macro trends and figure out which clients to focus on. Plus, Indian clients have this thing of wanting to meet their private bankers in person. The reasons are obvious. It's just better for them to trust somebody that they have met in real life. And a big part of the job is not just preserving wealth, but also making it grow. Sometimes the strategy extends even further up to 20 to 30 years where asset protection and succession planning becomes crucial. In fact, succession planning has been in high demand, especially among Indian clients recently, who want to secure their family wealth for future generations. So 80 to 100 hour work weeks have become the norm for these bankers. But long hours are just the

beginning. Clients are looking at them as the guardians of their money. And with the kinds of amounts involved, there is no room for mistakes. Coming up next, the IPCC. Online advertising is brutal. It is a jungle out there. And just like the jungle, some beasts are at the top of the food chain. You've probably heard of some of them. Group M, Publissus, Denso, Madison, IPG. These are the ones who are bigger than everyone else and hold the accounts for some of the world's biggest advertisers. I'm talking Coca-Cola, Nike, Unilever. Just last week, Coca-Cola took away its North America media business from Group M and gave it to publicists for a cool $700 million. In the jungle, these ad agencies aren't just big predators, they are giants. And last week, the Competition Council of India attacked all the giants all at once. Why? Well, in this week's episode of The Nutgraph, my colleague Praveen Gopal Krishnan explored just that.

Here's a snippet from the show. A lot of mysterious things have happened, but it's really uncomplicated. clear who caused it to happen. If this were a murder who done it, it would be like if someone tore out the final pages that finally reveal the killer. I imagine this would be frustrating to you as a reader, but I'm being upfront that I don't really have a clear-cut answer. All I can promise is that I'll make the crime as interesting as I can and tell you who gains and who loses and you can gauge the motives for yourself. Maybe there isn't one killer.

Perhaps there are several. Or perhaps there are none. You decide. I'll start with the most exciting part, the murder itself. Here's the news from two days ago, as reported by Reuters and the title of the story is India Raids Ad Giants Group M Publissus Broadcasters Group over Price Collusion, Sources Say. And this is the relevant paragraph.

Quote, the Indian antitrust body has raided. the offices of many global advertising giants, including Group M, publicists, Dentsu and Interpublic Group, and a broadcaster's industry group over alleged price collusion. People with direct knowledge told Reuters on Tuesday. Officers of the Competition Commission of India searched around 10 locations after it initiated a case against the agencies and top broadcasters over allegedly fixing ad rates and discounts. said one of the sources. The raids were being carried out in Mumbai, New Delhi and Goodgown.

The first source said five other sources familiar with the ongoing antitrust operation confirm the names of the entities being raided. The raids come as the ad landscape in India is seeing major shifts following the 8.5 billion merger between Walt Disney and Reliance's India media assets, which Jeffrey's analysts say will have a 40% share of the ad market in TV and streaming segments. End quote. A link to the full episode will be in the show notes.

Next up, my colleagues, Dikta has a message for all of you. Next Tuesday, Rahel, will be talking to our reporter Abhirami about her story on the Bangalore water crisis. In the report, Abhirami investigated how the government's inability to solve the recurring problem has made way for private players to take over and, monetize the water infrastructure of the city. If you have any opinions or questions on this issue, please send us a voice note or text us on our WhatsApp number. The best ones will get featured on the podcast and we will have Abirami answer them. Our number is 89711-9-8379. And with that,

it is a wrap. Thank you for tuning in and have a great weekend. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by Rahil Filippos and I, Sinkda Sharma, and it was edited by Rajiv Sien.