The third story in the series of investigations by TNM-Azhimukham explores how the aggressive, aspirational marketing of Phygicart, a Multi-Level Marketing company promoted by Boby Chemmanur, created wealth for some but turned into a dangerous debt trap for many young people. Read the first part on LLPs here and the second part on Malankara Credit society here.
In some of his Instagram photos, G Gokul looks every bit the success story his bosses wanted him to be: two-piece suit, luxury car gleaming behind him, curated aesthetics of someone who'd cracked the code to easy wealth. The images were designed to make other young people believe they could live this life too, if only they joined Phygicart.
The car the 29-year-old from Balussery in Kozhikode was leaning against did not come from his earnings but a hefty loan he was allegedly coerced into. Every element of the lifestyle he projected on social media was a performance that ‘upline’ managers insisted was necessary to recruit more people into the pyramid beneath him.
Like many of his acquaintances in Balusseri, a suburb in Kerala’s Kozhikode, Gokul was introduced to Phygicart E-commerce Private Limited, promoted by businessman Boby Chemmanur, during the second phase of the COVID-19 lockdown in Kerala in 2021. He worked as a ‘Phygicart affiliate’ for nearly three years before realising the pitfalls.
"Once you enter the first step – star – the leaders would urge you to buy branded shirts and shoes," Gokul told TNM in August 2024. "Those who buy shirts worth Rs 500 will have to buy branded shirts. One has to flaunt a luxury lifestyle to bring in more people to the scheme, they would say," he said.
By the time he reached the third stage, Bronze, the pressure intensified. "They forced me to book a car. The leaders would also pressure us to resign our jobs and join Phygicart full-time."
Phygicart, like other multi-level marketing schemes, doesn’t just sell products. It sells aspiration. There are multiple videos on social media featuring Phygicart team members dramatically lighting smoke grenades and flares as they unveil high-end cars that have been brought by successful team members.
To bring in new recruits, men like Gokul, caught in its middle tiers, had to flaunt wealth, even as they sank deeper into debt. “No one, especially youth who are about to start a career, should get trapped into schemes like this,” said Gokul, who now works abroad.
It was the trust he had in the influential businessman Boby Chemmanur and his friends that made him join the scheme.
He was not alone.
The MLM scheme offered the dream of disposable income, snazzy cars, and exotic vacations. The company’s revenue hit a decline in 2023, financial documents show.
Phygicart’s last reported Annual General Meeting (AGM) date was September 30, 2023. While the company is active and continues to meet regulatory filing obligations including the Goods and Services Tax (GST) returns, financial statements for the 2023-24 fiscal have not been filed.
The birth of Phygicart
On its website, Phygicart – a portmanteau of words physical and digital – defines itself as an e-commerce and direct selling entity. It claims to follow a binary model of Multi-Level Marketing (MLM) for the sale of a diverse range of FMCG, health, and lifestyle products. The model heavily favours the sale of expensive product bundles rather than individual items. These high-value packs – priced in the range of Rs 5,000 up to over 12,000 – are critical for distributors to earn sales volume (SV) commissions.
Founded in Dubai in 2016 by entrepreneurs Anish K Joy and Jolly Antony, Phygicart made a high-profile entry into the Kerala market in July 2018. The expansion was driven by Boby, roped in as the promoter and the launch event featured Bollywood actress Tamannaah. The inauguration was by then-Civil Supplies Minister P Thilothaman.
In 2021, despite widespread lockdowns and economic uncertainty the direct selling industry saw remarkable growth. This was the period when Phygicart saw an upswing. The pandemic-induced job losses pushed many to seek alternative or supplementary income. Joining a direct selling business offered an attractive low-investment entrepreneurial opportunity.
In 2022, Boby claimed that Phygicart had over four lakh members and it was the top direct selling firm in south India. The number of active direct sellers in the country, according to the Indian Direct Selling Association (IDSA), was 86 lakh in 2022-23. The direct selling gross turnover for the period was Rs 21,282 crore.
IDSA data for FY 2023-24, shows ten states - Maharashtra, West Bengal, Uttar Pradesh, Bihar, Karnataka, Odisha, Haryana, New Delhi, Assam, and Gujarat - collectively drove 69.2% of the Indian direct-selling industry’s total sales turnover. Within the south, Karnataka leads significantly with 37.2% of the regional revenue, followed by Tamil Nadu (20.9%) and Telangana (16.3%). Kerala ranks fourth, contributing 14.8%.
Phygicart, however, is not part of the IDSA.
The company's key metrics for the Financial Year 2022-23 indicate a sharp decrease in revenue - Rs 99.3 Cr - compared to 2021-22, when it recorded Rs 217.5 Cr. One of the reasons for the slump in revenue could also be due to the number of affiliates going down.
Documents show the company achieved Peak Profitability in FY-2020-21, when the EBITDA margin peaked at 14%. These margins dropped steeply, falling to 3% in FY-2021-22 and rising slightly to 4% in FY-2022-23.
The EBITDA margin is a key profitability ratio used to evaluate a company's operational strength. It shows the percentage of revenue a company retains before accounting for financing costs (interest), government levies (taxes), and non-cash expenses (depreciation and amortization).
In the 2022-23 financial statements, the auditor notes that the company failed to provide information to substantiate the amount of commission expense recorded in the books and the amount of reward wallet under current liabilities. The board in its reply blamed this on the software issues and steps would be taken to rectify them.
In Balussery, flashy cars and EMI debt traps
Gokul's hometown Balussery, is central to the Phygicart growth story and eventual disenchantment. The small town’s involvement with the scheme was pervasive.
Two Balussery natives, Rijil Bharathan and Ranjulal, cited as the highest revenue generators of Phygicart in the region, played a major role in popularising the business.
Their success stories, widely shared on social media, and the lack of job opportunities during COVID-19, drew many youngsters to Phygicart. “In our meetings, the team leaders would ask us to stand up if we had not purchased a car yet. It was humiliating and stressful. They make us feel that we were not doing justice to our work,” said Gokul.
Selling his gold chain, pawning his mother’s jewellery and taking loans, Gokul purchased a Skoda Rapid, priced around Rs 13 lakh in December 2021. “The pictures and videos of the purchase were shared widely by Phygicart members in social media platforms,” he said.
Gokul was struggling to make his ends meet and the car’s EMI, around Rs 21,000, added to his troubles. “After senior leaders persuaded me to join Phygicart as a full-timer, I quit my job in a real estate firm. They assured me a monthly performance bonus of around Rs 40,000 once I made it to the Bronze stage. A payment of Rs 9 lakh was assured for those who reach the top level, known as crown ambassador,” he said.
Gokul said that Phygicart had offered 'car funds' of Rs 5 lakh for zonal sales managers. "Certain criteria had to be met to qualify for the car fund. Only those who reached the seventh level were eligible. However, they started forcing people to buy cars as early as the third level," Gokul said
In a public speech in 2022, Boby said that he could never assure anyone of earning in lakhs if they don’t do business. “Some complain I lost money, I lost money. You will get money only if you work hard,” he said.
“You might get only Rs 5000 in the first month. Next month, it will be Rs 10,000. Then Rs 25,000, Rs 50,000, Rs 1 lakh, Rs 5 lakh and Rs 50 lakh over the period of four years. This is not a lottery. You will get money if you work hard,” he said.
Gokul said that his Phygicart earnings for the period, nearly three years, was Rs 3.5 lakh. He spent nearly Rs 2 lakh on fuel alone, canvassing people in and around Balussery. “The highest I made in a month was Rs 42,000, that too, only once. Sometimes, it was just Rs 2000,” he said.
Nearly ten months after the purchase, Gokul sold his car for half the price. He was left with a debt of Rs 16 lakh, poor CIBIL score, strained relationship with some of his friends and a ruined career—the balance sheet of his Phygicart life.
Arjun KM, a 26-year-old, was introduced into Phygicart by Gokul, but he still does not blame him. “He used to lend me money during my studies. The Phygicart team wanted everyone to target people who are very close, someone who can’t say a no to them,” said Arjun.
Arjun too was made to purchase a car – Volkswagen Polo – which he had to sell after a few months. From selling gold rings of his twin nephews to pawning jewellery of his sister, Arjun had a tough time managing his finances. By age 26, the huge debt he incurred had extinguished Arjun's hope of completing his Teacher Training Education (TTE) course. "I loved teaching, and now I've landed here," Arjun said, pointing to the mobile phone shop where he works as a salesperson.
The room which was once a Phygicart store in Balussery had been turned into a hair salon during our last visit. A banner displaying ‘for rent’ could be seen in front of another multi-storeyed building designated as a major store of Phygicart products.
“It was advertised as a one-stop store for purchase of all Phygicart products. It never opened,” Gokul said.
Reality bites
In 2023, a small circle of six Phygicart 'affiliates', including Gokul, established a WhatsApp group called 'Reality' to privately discuss the issues they were encountering. As the group expanded, members began sharing experiences without the interference of company 'leaders'.
“Soon it had over 200 members. As the group became popular, Phygicart called us for a settlement. When ignored, a legal notice was sent demanding Rs 10 crore for defamation. Around 6-7 other members also got Rs 10 crore defamation notice. This was to create a scare in those who are trying to speak up,” said Gokul. Later, he received a call from Thrissur East police station.
“Police said I had to reach the station with five others in the WhatsApp group, whom they named,” said Gokul. At the station, Gokul alleges that the police tried to intimidate them, initially.
“Some of the top management of Phygicart, including Anish K Joy, were present at the station. The Phygicart team sensed that things would go out of their hands. So they withdrew the case,” he said.
Arun Kumar, who now works as a karate teacher, said that there was no point in complaining against Phygicart as it was hard to find illegality in its operations. “There is no membership fee. You are supposed to join for free. The money is for the products you sell. The firm follows all existing guidelines,” he said.
But a moment of reflection came when he had to sell an expensive toilet cleaner to a family which was living in a shack. “We never had the intention to cheat them. We genuinely believed then that they would get a better life by joining the scheme,” he said.
Arun Kumar said he had earned a decent remuneration from Phygicart for a while. “It’s like the snake and ladder game. You earn a good amount and reach the top of the ladder and then the snake catches you. It is not easy after that point. You get a few points, but that won’t take you to the top ever again,” he said.
Varkala-native Praveen (name changed on request) joined Phygicart in 2019 while he was just a higher secondary student, despite objections from his family who were aware of the risks. Praveen, who purchased a Swift Dzire car as an affiliate and had dreamt of becoming a journalist, is now working as a taxi driver. His family is still unaware of his debts.
Many youngsters consider Phygicart to be a wrong turn in their career.
Kozhikode native Sinoj (name changed on request) dropped out of a biomedical engineering course after he joined Phygicart. Pressured by the ‘leaders’, Sinoj had purchased a Hyundai Verna car, which had an EMI of Rs 25,000. Now he makes his living shuffling two jobs, as a rubber tapper and a salesman at a mobile shop.
Anu (name changed) joined a hospital in Chennai as a nurse after losing all her savings in Phygicart.
“I can’t even afford to take a leave or go home. A small change in routine would turn my financial planning upside down,” she said over phone from Chennai. Anu said that she had added several elderly women in her neighbourhood to the scheme and is now feeling guilty of dragging them into financial troubles. The financial and emotional impact it had on her was unbearable, she said.
Several former associates of Phygicart TNM had spoken to did not want to share their experience, though they lost money and had faced harassment from ‘leaders’ .
Boby’s answer to those who spoke against his business was that “the egg won’t hatch if you just sit over it.”. He said those who complain against the scheme have no idea regarding sales.
Multiple success stories of Phygicart affiliates can be found online. Boby Chemmanur recently rewarded Sabitha, a national sales team manager of Phygicart, with two gold coins. In one of her old videos, Sabitha said that she had reached a position of earning Rs 30,000 per day in two years. She said she purchased a flat worth Rs 2 crore in Palarivattom.
When TNM-Azhimukham sought responses on the allegations against Phygicart, they led us to one of its successful members – Praveen Chirayath from Thrissur, a national sales team manager. Praveen said he has been part of Phygicart since its inception and is currently in the number one position, earning an average of Rs 25,000 per day for the past four years. “Last month alone, I paid Rs 89,000 GST,” he said.
Praveen said that around six lakh affiliates have joined under his chain since 2018. In 2022, Boby had claimed that they have four lakh affiliates. The company now says they have one lakh affiliates but did not offer clarity on average distributor earnings.
“There are six major types of income. Major income is daily team building bonus. The maximum one can earn is Rs 30,000 per day,” he explained.
Praveen said that the least amount of purchase needed to join the scheme was Rs 4,999. Direct Selling Rules 2021 have clauses against inventory loading and mandatory purchases or inventory stocking for distributors but does not specify when and how it exceeds "quantum and values that can be expected to be sold or resold to consumers."
When asked about allegations that leaders force downline staff to buy vehicles, Praveen blamed it on strategies adopted by various teams. “I never ask anyone to buy vehicles. The company provides fund support of Rs 50,000 to buy a bike when one achieves 20,000 SV left and right, which is around Rs 4 lakh income. Similarly when 1 lakh SV matches on left and right, for around Rs 20 lakh income, a car fund of Rs 5 lakh is offered and so on. But there are criteria for one to be eligible. However, it is up to the affiliate to buy or not. Issues happen when someone makes false promises to make people join the chain,” he said.
Regarding selling products to non-participants of the scheme, Praveen said the company normally does not promote such sales as the invoices are in the name of affiliates.
The Phygicart model
MLM companies primarily use three network structures: Unilevel, Binary, and Matrix. While the Unilevel has unlimited width (any number of people can be sponsored directly) and a linear, limited depth (commissions paid on fixed number of levels), the Binary enforces strict limited width. Each distributor can have only two frontline distributors (a left leg and a right leg), forming a binary tree. Commissions in the Binary plan revolve around balancing the volume generated by these two legs. Distributors earn commission based on the matched sales volume between their weaker and stronger legs, not simply the pairing of distributors. The Matrix model imposes strict limitations on both width and depth.
Phygicart, which follows a binary model, contends that their business is not illegal as there is no joining fee for new members. Instead, the money is collected in the form of the price of products. Till a few months ago, each participant had to purchase products ranging from Rs 18,000 to Rs 26,500 to join the ‘chain’.
Income depends on the sales volume (SV) and business volume (BV) of products sold by a member and the members they recruit. For earnings to be credited, the SV on both sides of the chain has to match, as per binary model. For instance, if one side has an SV of 100 and the other has 50, the income is calculated on the lower SV of 50.
Products carry different SVs. Everyday items like sugar have very low SV (0.02), while expensive health supplements like Arya Sukta Noni Kokum Plus have a high SV (25) as per the website on November 26, 2025. Bonuses are given only after a member reaches 100 SV, and there is a limit on daily credit.
Former members say that unless a person keeps adding new participants who also sell actively, it is difficult to recover even the initial amount spent on joining.
While there is no enrollment fee and the plan explicitly states that there is no benefit for recruitment of direct sellers, which the Direct Selling Rules prohibit, the mandatory initial product purchases to generate a certain SV points towards a compensation structure that rewards recruitment.
Despite widespread resentment among Phygicart affiliates and allegations of losing money, no police complaints have come to our notice. No official grievance redressal mechanisms were pursued either.
Fresh attempts
Even as it displayed the tell-tale signs of earlier Ponzi and pyramid schemes that had gone bust, Phygicart was celebrated.
And like other MLMs, Phygicart too has its share of fervent detractors and enthusiastic supporters. On one hand, a growing number of former associates have come forward, alleging significant financial losses, while active affiliates and YouTube channels like Phygilife and Powerofphygicart, continue to promote a rosy picture.
In a video uploaded three months ago on YouTube, Boby Chemmanur is seen denying rumours of Phygicart shutting shop. "How long will the Phygicart run? Till I die," he said dismissing such news as misinformation.
His former partners have started new ventures. Anish runs a cosmetic brand named Klamy while Jolly launched a new direct selling company Growvia Ecom Marketing Pvt Ltd, in August 2025. Most of the sales managers of Phygicart switched to Growvia overnight. Rijil Bharatan and Ranjulal Parappil, celebrated for being Phygicart stars, are now directors of Growvia.
Speaking to TNM-Azhimukham, both Jolly and Anish said that they both left the firm following differences over lucky draws and schemes including sale of gold and tea with Boby in 2023. “We had conceptualised Phygicart as a direct selling firm in Dubai. Boby offered to bring football legend Maradona for promotion. Boby’s initial investment was around 40 lakh though he offered Rs 2.32 crore. He pocketed 70% of shares after convincing us that he would help the company grow,” alleged Anish.
Jolly said Boby didn’t join the company as a director despite their repeated demands. “Like his other firms, Boby preferred to remain as an investor. However, he earned a monthly brand ambassador fee,” he said. Financial documents show a payable brand ambassador fee Rs 26.64 lakh as on March 31, 2023.
Jolly said he sold his 15% share to Boby’s son-in-law, while Anish said he voluntarily withdrew after Boby refused to let him go.
As on March 31, 2023, Phygicart had six shareholders—CD Boby, Thandiakkal Antony Jolly, Anish Karottel Joy, Devadasan, Chelleri Suveena and Chengarcheri Anil. The last three are designated partners in multiple LLPs linked to Boby. While Boby held around 69.68% of the shares as on March 31, 2023, Anish and Antony Jolly held nearly 15% each. The sale of shares as claimed by Jolly could not be verified but 80 lakh equity shares with a face value of Rs 5 each have been transferred to Avandhika Gold and Diamonds LLP. The firm’s designated partner Babu is linked to Orelia Jewellers LLP.
MLM companies that faced action
In 2017, the ED had attached property worth Rs 150 crore belonging to key personalities of a high profile MLM firm Gold Quest, run by QI group of Malaysia, under the Prevention of Money Laundering Act.
The TN police had slapped them with various sections of the Prize Chits and Money Circulation (Banning) Act, 1978 for running a human pyramid scheme selling gold and silver coins at exorbitant rates, allegedly a scam of Rs 1100 crore.
Gold Quest resurfaced later in the name QNet, which too faced investigation. An official with the CBCID wing of TN police, who was part of the Gold Quest investigation, said that the MLM firms that violated norms could be brought to book using the provisions of Prize Chits and Money Circulation (Banning) Act. Many enforcement agencies were not using the Act enough, he said.
The Prize Chits and Money Circulation Schemes (Banning) Act makes it illegal for any MLM in India to generate income for a participant through the mere act of recruiting or referring a salesperson. The Act addresses the generation of income based on recruitment or referrals and defines "money circulation scheme" as any scheme which "for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money.
The Consumer Protection (Direct Selling) Rules, 2021 (issued by the Ministry of Consumer Affairs) further clarify this distinction. These rules explicitly state that no direct selling entity or scheme shall "promote a Pyramid Scheme or participate in any Money Circulation Scheme." Kerala, along with seven other states, notified the rules in 2023.
They require direct sellers to earn commissions based on the actual sales of goods and services, not recruitment. The Rules define a Pyramid Scheme as one formed by subscribers who receive any benefit from their enrolment or performance of additional subscribers to the scheme, holding a higher position, thereby resulting in a multi-layered network of subscribers.
In April 2023, Kerala, along with seven other states, notified guidelines for monitoring direct selling entities under the Union government’s Consumer Protection (Direct Selling) Rules, 2021. The guidelines prohibit enrolling participants in pyramid schemes in the garb of doing direct selling business.
A month later, a Phygicart ‘national’ family event ‘Chalo Bharat’ held on May 24, 2023, at Adlux international convention centre was attended by Dr Thomas Joseph Thoomkuzhy. An Associate Professor with Gulati Institute of Finance and Taxation, he was the subject expert, Direct Selling Monitoring Authority, set up by the Government of Kerala.
In the video of the event, Thomas is seen praising Phygicart as a 'law-abiding firm' and a 'great venture'. When TNM sought a response from Thomas, he said he does not have much information about Phygicart activities now. "I can’t comment on Phygicart without checking their account details, like the balance sheet of the past three years. I heard that there was a split in the management," he said, adding that the video in which he is seen speaking was an old one. When asked about the alleged pyramid model of Phygicart, Thomas said the structure could be damaging only when it involves circulation of money. "When the focus of the structure is products, it won't be an issue," he said.
Sajith Babu, who was the Commissioner of Civil Supplies and Consumer Affairs in Kerala, said that they haven't taken any action against any MLMs companies in Kerala. He said that the responsibility to take legal action for alleged violation of MLM rules lies with the Competent Authority for the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019.
Section 5 of BUDS Act prohibits the making of false or misleading statements to induce people to invest in unregulated deposit schemes. But the Competent Authority can act only if the police register a case. H Ventikesh, former ADGP (Crimes), said that there was no record of any FIR against Phygicart.
In 2023, the GST Intelligence Unit in Kanhangad began probing Phygicart for alleged turnover suppression. An inspection revealed an anomaly of Rs 37.86 lakh in the fiscals 2017-18 to 2022-23. Following this, the firm remitted Rs 11.57 lakh as fine.
It was the only instance when Phygicart faced action from a regulatory authority.
The RBI, in the 59th meeting of the state level coordination committee in January 2024, shared that it received multiple market intelligence inputs regarding Phygicart.
“On discreet enquiries made with members, it was ascertained that the prerequisites for entry into the scheme include purchase of goods for a certain amount from the store, which results in granting of loyalty points, which is then used to create user IDs. Subsequently, these individuals who have obtained user IDs have to add more people to the scheme. Addition of new members is rewarded either by commission or granting of gifts/benefits etc. This appears to be a camouflaged money chain / MLM scheme,” the RBI warned in the meeting.
Though the then Chief Secretary V Venu advised the police to keep a constant vigil on the scheme and initiate proper action when necessary, no case was filed.
TNM-Azhimukham had sent a detailed questionnaire to Boby Chemmanur and his Public Relation Officer seeking responses to the allegations against Phygicart. While we did not receive a a written response from them, Jisso Baby, Chairman of Malankara Multi-State Cooperative Credit Society (MMSCCS), speaking on behalf of the group said that he was not aware of the company not filing financial documents after 2023. He said that there were issues with partners during that time, but the group did not want to make comments on people who left. “The operations of Phygicart are going on perfectly fine. There are around 1 lakh affiliates now. I can't clearly say whether it is on profit without checking the accounts,” he said.
Regarding allegations of affiliates being forced to flaunt wealth, Jisso said that there was some kind of ‘show off’ involved in sales and marketing. “Even illiterate people are part of Phygicart. They are given orientation on many things including use of smartphones. They will be told to present themselves well. Some leaders might advise them to buy vehicles because that would attract more people. These affiliates might not know how to manage their finances. It might hit only when they find it hard to pay their EMI. Their operations fail when they don’t take proper care of the team under them,” Jisso said.