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The company derives a significant majority of its revenue from the sale of self-loading concrete mixers (85.13% of the company revenue from operations for the Financial Year 2024). Any decrease in sales of SLCMs or demand for concrete equipment in India could adversely affect its business, results of operations, financial condition and cash flows.
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The company business is seasonal in nature and any decrease in sales during certain quarters could have an adverse impact on its financial performance.
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Fluctuations in prices of materials, and disruptions in the timely availability of materials could have an adverse effect on its business, results of operations, financial condition and cash flows.
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All its assembling and manufacturing facilities are located in the state of Karnataka, which may expose it to regional risks that could adversely affect the company business, results of operations, financial condition, and cash flows.
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Its Statutory Auditors` audit reports and annexures to auditors` reports which discloses matters specified in the Companies (Auditor`s Report) Order, 2020 for the past three Financial Years have included certain modifications. If similar modifications are included in the Statutory Auditors` reports for its financial statements in the future, the trading price of the company Equity Shares could be adversely affected.
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The company currently assemble substantially all SLCMs at its Obadenahalli Facility and aggregating to 99.06%, 98.83%, 98.41% and 96.98% of all SLCMs manufacturing by it during the six months period ended September 30, 2024 and Financial Years 2024, 2023 and 2022 respectively. Any disruptions or stoppages at this facility or other facilities could adversely impact its operations, financial condition, and results of operations.
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Its business has grown rapidly and the company may not be able to sustain its historical growth rates in the future. Any inability to manage the company growth effectively and execute its growth strategy in a timely manner, or within budget estimates, could have an adverse effect on its business, results of operations, financial condition and cash flows.
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The company relies on its dealer network to sell and distribute a majority of the company products and provide after-sales service. Any disruption in its dealer network could have an adverse effect on the company business, results of operations, financial condition and cash flows.
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The leases for two of its assembling and manufacturing facilities have expired. While the company has made applications to obtain ownership of these land parcels, there can be no assurance that its will be successful. This may adversely affect the company business, results of operations, financial condition and cash flows.
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Proceeds from the Offer will not be available to it.
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One of the members of its Promoter Group has not consented to the inclusion of, nor has he provided, information or any confirmations or undertakings pertaining to himself or the entities in which he holds/may hold interest, which are required to be disclosed in relation to the Promoter Group under the SEBI ICDR Regulations in the Draft Red Herring Prospectus. The disclosures relating to this member of the Promoter Group has been included in the Draft Red Herring Prospectus based on information available in public domain. Accordingly, the company cannot assure you that the disclosures relating to such member of its Promoter Group is accurate, complete, or up to date. Further, details in relation to connected persons which may qualify as members of its Promoter Group have not been disclosed in the Draft Red Herring Prospectus and this Red Herring Prospectus.
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There have been few instances of non-compliances, including with respect to certain regulatory filings for corporate actions taken by the Company in the past. Consequently, its may be subject to regulatory actions and penalties for any such non-compliance and its business, financial condition and reputation may be adversely affected.
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The company has entered into and will continue to enter into related party transactions. Its cannot assure you that such transactions, individuals or in the aggregate, will not have an adverse effect on its business, financial condition, results of operations and cash flows.
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The Company has been sanctioned unsecured loans from banks and other financial institutions, which may be recalled on demand.
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Some of its Promoters does not have adequate experience in the company line of business and have not actively participated in the business activities its undertake, which may have an adverse impact on the management and operations of the Company.
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Its success depends on the company ability to develop and commercialize new concrete equipment in a timely manner. If its design, engineering and development efforts does not succeed in a timely manner or at all, or if the products the company develop and commercialize does not perform as expected, its business, financial condition, results of operations and cash flows could be adversely affected.
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The company is subject to risks associated with product recall due to defects in its construction equipment, which may adversely affect the company reputation, business, results of operations, financial condition and cash flows.
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If the company is unable to maintain the existing level of capacity utilization at its assembling and manufacturing facilities, the company margins and profitability may be adversely affected. Further, a slowdown or shutdown in its assembling and manufacturing operations could have an adverse effect on its business, results of operations, financial condition and cash flows.
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The company may encounter delays in the completion of the construction of its assembling and manufacturing facility in Adinarayanahosahalli, Karnataka.
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Its success depends on the company ability to identify market trends and meet evolving customer demands, while keeping up with technological advances and effectively integrating new technologies into its construction equipment. If the company is unable to do so, its sales volumes, business and results of operations would be adversely affected.
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The company is exposed to the risk of loss of confidential technical knowledge which includes trade secrets, assembling and manufacturing processes, and other confidential information critical to its operations.
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There are outstanding legal proceedings involving the Company, its Promoters, and the company Directors.
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The company faces significant competition from domestic and international construction equipment manufacturers which may lead to a reduction in its market share, which in turn may adversely affect its business, results of operations, financial condition and cash flows.
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If the company fails to obtain, maintain or renew statutory and regulatory licenses, permits and approvals required for its business and operations, the company business, results of operations, financial condition and cash flows may be adversely affected.
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Some gift deeds entered into by/in favour its Promoter and members of the Promoter Group with various parties are not adequately stamped. The said gift deeds may not be admissible as evidence in a court of law, until the relevant stamp duties are paid and the relevant registration, if required, is completed.
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Non-compliance with and changes in, safety, environmental and labor laws and other applicable regulations, may adversely affect its operations.
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The company has certain contingent liabilities and capital commitments, which, if they materialize, may affect its results of operations, financial condition and cash flows.
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The locations of its dealers is critical to the company success. The company cannot assure you that the current locations of its dealers will continue to be attractive as demographic patterns change.
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Its warranty reserves may be insufficient to cover future warranty claims, which could adversely affect its financial condition, results of operations and cash flows.
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The company has utilized cash for investing activities and financing activities in the past and any net negative cash flows in the future could adversely affect its cash flow requirements.
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The success of its business depends substantially on the company management team and operational workforce. Its inability to attract or retain such manpower could adversely affect the company business and operations.
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The company relies on third-party logistics and transportation providers to transport its construction equipment from the company assembling and manufacturing facilities in Karnataka to its dealers across India and to international markets, and for the inbound transportation of materials and components to its assembling and manufacturing facilities. Any disruption in the logistics or transportation network in India, or any deficiency in service by these third-party transportation providers, could adversely affect its operations, business, results of operations, financial condition, and cash flows.
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The company employees may engage in misconduct or other improper or illegal activities, including misrepresentation, non-compliance with regulatory requirements and breach of contractual obligations.
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Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect the company business, results of operations, financial condition, and cash flows.
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Its may not be successful in implementing the company business strategies. Any failures to raise additional financing could have an adverse effect on its business, results of operations, financial condition and cash flows.
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The company may not be able to successfully identify and conclude acquisitions or manage the integration of or harness synergies from acquired businesses, which may adversely affect its business, results of operations, cash flows and financial condition.
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The company insurance coverage may not be sufficient or adequate to cover its losses and liabilities. If the company suffer a large uninsured loss or an insured loss that significantly exceeds its insurance coverage, the company business, results of operations, financial condition and cash flows may be adversely affected.
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Significant disruptions of information technology systems or breaches of data security could have an adverse effect on its business, results of operations, financial condition and cash flows.
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Its business relies on the adequate and uninterrupted availability of fuel, electrical power, and water to maintain continuous operations. Any disruptions in the supply of electrical power, whether due to natural calamities, fuel shortages, or other factors, could significantly impact its assembling and manufacturing processes.
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The company use heavy equipment and machinery at its assembling and manufacturing facilities which could cause bodily harm and accidents, which in turn could adversely impact its operations.
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The company operations could be adversely affected by strikes, labor unrest or labor unions.
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The compnay may be unable to obtain and maintain the intellectual property rights for its brands or protect the company proprietary information.
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The company has used information from the Redseer Report which has been commissioned and paid for by the Company for industry related data in this Red Herring Prospectus, and any reliance on such information is subject to inherent risks.
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Its may be negatively impacted by any early obsolescence of the company assembling and manufacturing equipment and the spare parts or software used in such equipment.
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Its listed peers may outperform us in certain financial and operational key performance indicators, which could adversely affect its competitive position, reputation, market share and business.
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Information relating to the installed capacity, actual production and capacity utilization of its assembling and manufacturing facilities included in this Red Herring Prospectus is based on various assumptions and estimates, and future production and capacity may vary.
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The company cannot assure payment of dividends on the Equity Shares in the future and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
