Gandhar Oil Ref.

Leading market share of the Indian white oils market with significant overseas sales, focused on the consumer and healthcare end-industries.

Extensive and diversified customer base and a supplier base comprised of leading oil companies with competitive pricing terms.

Strategically located manufacturing facilities and in-house R&D capabilities.

Resilient, flexible and scalable business model with prudent risk management framework.

Track record of consistent financial performance.

Experienced and qualified management team.

The company depends significantly on its personal care, health care and performance oil business division and downturns in the industries addressed by this business division or an inability to manage sales by the business division effectively leading to any reduction in revenue from this division could adversely affect its business, financial condition and results of operations.

The company is subject to strict quality requirements and standards and inspections and the success and acceptance of its products by its customers is largely dependent on its ability to meet such quality requirements and standards. Its failure to comply with the quality standards and technical specifications prescribed by such customers may lead to a loss of business from such customers and could negatively impact its reputation, which would have an adverse impact on its business prospects and results of operations.

Its inability to effectively manage its growth and expansion or to successfully implement the company`s business plan and growth strategy, including in relation to the expansion of its manufacturing plants, could have an adverse effect on its business, results of operations and financial condition.

Delays, interruptions or reduction in the supply of raw materials to manufacture its products and abrupt fluctuations in the prices of its raw materials may adversely affect the company`s business, results of operation, financial condition and cash flows.

The company is exposed to counterparty credit risk and any delay in, or non-receipt of, payments may adversely affect itsr cash flows and results of operations.

Exchange rate fluctuations in various currencies in which the company do business could negatively impact its business, financial condition and results of operations.

Its overall business and the demand for the company products is dependent on the end industries in which its products are used and any decline in the demand for its customers` end products could have an adverse impact on its business, results of operations, cash flows and financial condition.

Any slowdown or shutdown in its manufacturing operations, or under-utilization at its manufacturing facilities, including due to labour unrest, or any inability to obtain adequate electricity, fuel or water with respect to such operations, could have an adverse effect on its business, results of operations, financial condition and cash flows.

The company obtain a substantial portion of its raw materials from a limited number of suppliers and the company does not have long-term contracts with its suppliers. If one or more of its top suppliers were to suffer a deterioration of their business, cease doing business with it or substantially reduce their dealings with the comaany, its business, results of operations, cash flows and financial condition may be adversely affected.

The company have significant working capital requirements. If its experience insufficient cash flows to fund the company working capital requirements or if its not able to provide collateral to obtain letters of credit and bank guarantees in sufficient quantities, there may be an adverse effect on its business, cash flows and results of operations.

The ongoing novel coronavirus (COVID-19) pandemic and measures intended to prevent its spread have had, and may continue to have, a material and adverse effect on its business and results of operations.

The company does not have long-term agreements with its customers. If a significant number of its customers choose not to place purchase orders with the Company on a regular basis or choose to terminate its contracts, its business, financial condition and results of operations may be adversely affected.

There are pending litigations against the Company, certain Subsidiaries and certain Promoters and Directors. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, cash flows, financial condition and reputation.

The company will continue to be subject to certain obligations in respect of the Company`s erstwhile Coal Trading Business, which may adversely affect its financial condition, cash flows and results of operations.

The Pro Forma Consolidated Financial Information included in this Draft Red Herring Prospectus to reflect the impact of the sale of the Coal Trading Business, sale of coal trading business on account of sale of entire shareholding of the Company in Gandhar DMCC and the conversion of Texol into its Subsidiary is not indicative of the company expected results or operations in the future periods or its future financial position or a substitute for the company past results.

Its performance may be adversely affected if the company is not successful in managing its inventory balances.

The company has had negative operating cash flows in the past and may have negative operating cash flows in the future.

Its relies on Parekh Bulk Carriers, a member of the company Promoter Group and other third party transporters to transport raw materials for its products to its manufacturing facilities and the company products to its depots and customers, and any disruption in the company transportation arrangements or increases in transportation costs may adversely affect its business, results of operations and financial condition.

The improper handling, storage or processing of its raw materials or specialty oils and lubricants products, or any spoilage thereof, or any real or perceived contamination in its products, could adversely affect its business, results of operations and financial condition.

The company is unable to trace certain documents in relation to regulatory filings and corporate actions taken by the Company. Consequently, its may be subject to adverse regulatory actions and penalties for any past or future non-compliance and its business, financial condition and reputation may be adversely affected.

The company has made applications for compounding of, and have paid compounding fees for, offences in relation to instances of non-compliance with certain provisions of the Companies Act and FEMA.

The company also sell its products through a network of distributors and depots, and any inability to expand or effectively manage its growing distribution and sales network may have an adverse effect on its business, results of operations and financial condition.

Overseas sales account for a significant portion of its revenues. A failure to manage its business in overseas markets or its inability to grow the company business in new geographic markets may affect its growth which could have a material adverse effect on its business, operations, prospects or financial results.

The company may face a risk on account of not meeting its export obligations.

Its Promoters are involved in certain regulatory actions and proceedings and investigations in respect of certain criminal proceedings. Any adverse outcome in such matters may adversely affect its business, reputation, financial condition and results of operations.

The company face competition from both domestic as well as international markets and its inability to compete effectively may have a material adverse impact on its business and results of operations.

The company intend to utilize a portion of the Net Proceeds for funding its capital expenditure requirements. Its inability to successfully implement such capacity expansion or any future capacity expansion plans could have a material adverse effect on its business, prospects, operations, prospects or financial results.

Its funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution and its management will have broad discretion over the use of the Net Proceeds.

Non-compliance with and changes in, safety, health and environmental laws and other applicable regulations in its manufacturing operations may adversely affect the company`s business, results of operations and financial condition.

The company may be unable to obtain, renew or maintain statutory and regulatory permits, licenses and approvals required to operate its business and operate its manufacturing facilities, which could have an adverse effect on its results of operations.

The company has entered into certain exclusive distribution and partnership arrangements and have minimum purchase requirements under its supplier arrangements. Such commercial arrangements may affect its cash flows and results of operations.

Its insurance coverage may not be sufficient or adequate to protect it against all hazards, which may adversely affect its business, results of operations and financial condition.

Its Promoters, certain members of its Promoter Group, Directors and Key Managerial Personnel have interests in the company business other than reimbursement of expenses incurred or normal remuneration or benefits.

The company has availed of unsecured credit facilities from its Promoters and Texol has availed of an unsecured loan from ESPE Petrochemicals FZC, a shareholder in Texol, and others, which may be recalled at any time.

The company does not hold any patents or other form of intellectual property protection in relation to its manufacturing processes, and its inability to maintain the integrity and secrecy of its manufacturing processes may adversely affect the company business. Further, its inability to protect or use its trademarks may also adversely affect the company`s business.

Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations and cash flows.

The company is dependent on a number of key personnel, including its senior management, and the loss of, or its inability to attract or retain, such persons could adversely affect its business, results of operations and financial condition.

If the company is unable to raise additional capital, or are unable to obtain financing on favorable terms or at all, its business, results of operations, cash flows and financial condition could be adversely affected.

Any failure of its information technology systems could adversely affect the company`s business and its operations.

The interests of its Promoters, members of the company Promoter Group and its Group Companies may conflict with the company interests or with the interests of its other Shareholders.

Information relating to installed capacities and the historical production and capacity utilization of its manufacturing facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates by the independent chartered engineer verifying such information and its future production and capacity utilization may vary.

The company has certain contingent liabilities which, if materialized, may adversely affect its financial condition.

The Company will not receive the proceeds from the Offer for Sale.

Certain sections of this Draft Red Herring Prospectus contain information from the report on its industry titled "Assessment of the specialty oil industry in India and Global" dated December 16, 2022 prepared by CRISIL Market Intelligence & Analytics, a division of CRISIL Limited, and any reliance on such information for purposes of the Offer is subject to inherent risks.

Any variation in the utilisation of the Net Proceeds shall be subject to certain compliance requirements, including prior Shareholders` approval. If there are delays or cost overruns in utilization of Net Proceeds, its business, financial condition and results of operations may be adversely affected.

The company has entered into, and will continue to enter into, related party transactions which may potentially involve conflicts of interest.

If the company fail to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, the company financial risks, which may have an adverse effect on its reputation, business, financial condition and results of operations.

Its may be unable to enforce the company rights under some of its agreements with counterparties on account of insufficient stamping and non-registration or other reasons.

The company has in this Draft Red Herring Prospectus included certain financial and operational performance indicators, non-Ind AS measures and certain other industry measures related to its operations and financial performance. These operational metrics, non-Ind AS measures and industry measures may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other peer companies.

Significant differences exist between Indian Accounting Standards ("Ind AS") and other accounting principles, such as Indian Generally Accepted Accounting Principles ("Indian GAAP"), International Financial Reporting Standards ("IFRS") and United States Generally Accepted Accounting Principles ("U.S. GAAP"), which may be material to investors` assessment of its financial condition, results of operations and cash flows.