Garuda Cons

Thrust into the Construction and Development segment.

Increase its focus on and execute greater number of projects on a lock-and-key basis.

Continue focusing on timely completion.

Continue to maintain an asset light model for its business operations.

Expand its geographical footprint.

Expand its Construction activities across sectors.

Its primary focus is civil construction of residential and commercial buildings.

The Company has established a track record of successfully executing a diverse mix of construction projects i.e., residential, hospitality and commercial projects.

Its goal is to use its project management and execution capabilities to accomplish its projects on schedule while keeping high construction quality.

The Company has an experienced promoter and management team with its Chairperson and Managing Director who is also its Promoter, having over 2 decades of experience in various businesses, such as construction, hospitality and management services.

Its marketing and sales strategies.

Visible growth through increasing order book.

Its total revenue comes from the company top 10 clients, mainly its promoter related entities and group companies. The loss of any of its significant clients may have an adverse effect on its business, financial condition, results of operations, and prospect.

As a construction company, its limited experience in dealing with unrelated third-party entities presents challenges for its growth. If the company cannot establish ourselves successfully as developers or contractors beyond its promoter group and associated companies, the company longterm growth, operational results, and profits may be constrained. Notably, its revenue heavily relies on construction projects related to its Group Companies and promoters being 100.00%, 44.82%, 94.62% and86.65% in stub period ended April 30, 2024, March 31, 2024, March 31, 2023 and March 31, 2022 respectively.

The construction industry is cyclical and sensitive to changes in the economy and this could have a significant impact on its operations and financial results.

One of its Promoter - Mr. Pravin Kumar Brijendra Kumar Agarwal is involved in a criminal proceeding initiated by Airport Police Station which is currently pending before the Hon`ble Metropolitan Magistrate at Andheri, Mumbai. Any such proceedings, or any adverse action as a result of such proceedings, may affect the reputation of its promoter and subsequently that of the company`s business.

The Company had negative cash flow in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

The previous IPO filed by its promoter group PKH Venture Limited was not subscribed leading to withdrawal of the IPO.

Its business and profitability are significantly dependent on the performance of the real estate market generally in India and particularly in the Mumbai Metropolitan Region ("MMR"). Varying market conditions in the MMR may affect its ability to ensure sale of the company projects and the pricing of units in such projects, which may adversely affect its results of operations and financial condition.

Its contracts are mostly of the nature of EPC contracts and the company is exposed to inherent risks related to its contractual framework.

The company enter into various sub-contract agreements with primary contractors for construction projects. Such agreements contain conditions and requirements, the non-fulfilment of which could result in delays and its may be required to indemnify and compensate them.

Delaysin obtaining a requisite approvals or statutory clearances may lead to challenges and could adversely impact profitability and future projects like as happened with its "Trinity Oasis" project situated at Ghodbunder Road, Thane.

The Objects of the Offer for which funds are being raised have not been appraised by any bank or financial institution. The deployment of funds is entirely at the discretion of its management and as per the details mentioned in the section titled "Objects of the Offer". Any revision in the estimates may require it to reschedule the company expenditure and may have a bearing on its expected revenues and earnings.

The company does not have proof of payment of stamp duty on issuance/allotment of securities.

Reliance has been placed on declarations and affidavits furnished by its Directors, SMP, KMP for details of their profile included in this Red Herring Prospectus.

The company operates in a competitive industry and its failures to successfully compete may adversely affect the company`s business, financial condition and results of operations, and prospects.

Its business operations requires significant working capital. Insufficient cash flows to fulfill working capital requirements could detrimentally impact its operational outcomes. The company requires substantial financing for its business operations and the failures to obtain additional financing on terms commercially acceptable to it may adversely affect its ability to grow and the company future profitability.

The Company and its Holding Company has certain pending statutory dues as of April 30, 2024.

Its Promoter entity and Some of the company Promoters Group Entities, Subsidiary and Group Companies have.

There are outstanding legal proceedings involving the Company, Promoter, certain Directors and Group Companies which may adversely affect its business, financial condition and results of operations.

Its profitability and results of operations may be adversely affected in the event of any disruption in the supply of raw materials or increase in the price of raw materials, fuel costs, labour or other inputs. Its ability to pass on increases in the purchase price of raw materials, fuel and other inputs may be limited in the case of contracts with limited price escalation provisions. Further, its actual cost in executing its contracts may vary substantially from the assumptions underlying the company estimates.

Infrastructure projects are typically awarded to it on satisfaction of prescribed pre-qualification criteria and following a competitive bidding process. Its business and the company financial condition may be adversely affected if new infrastructure projects are not awarded to it or if contracts awarded to the company is prematurely terminated.

Bidding for a tender involves various management activities such as detailed project study and cost estimations. Inability to accurately estimate the cost may lead to a reduction in the expected rate of return and profitability estimates.

Its Order Book may not be representative of the company future results and its actual revenue may be significantly less than the estimates reflected in its Order Book, which could adversely affect the company results of operations.

The Company has in the past entered into related party transactions with its Promoter, Promoter Group Companies, and Group Companies may continue to do so in the future. There can be no assurance that their risks or liability will not fall on the Company. Further, there can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on its financial condition and results of operations.

Historically, the company has relied minimally on bank financing, with the majority of working capital needs being met through internal accruals.

The company does not own its Registered Office and have taken the same on leave and license basis from M/s Artemis Electricals and Projects Limited. Any revocation or adverse changes in the terms of the leave and license may have an adverse effect on its business, prospects, results of operations and financial condition.

The company relies on various sub-contractors for their services and factors affecting the performance of their obligations could adversely affect its reputation and business and revenues from the company operations.

The company procure materials and equipment from third parties for completion of its contracts and this exposes it to third party defaults and delays and non-availability of raw materials and equipment.

One of its Promoter- PKH Ventures Limited (formerly known as "P. K. Hospitality Services Private Limited") is involved in a criminal proceeding initiated by Prakash Soma Trilotkar one of its employees which is currently pending before the Hon`ble Labor Court, and Writ Petition filed by Asset Reconstruction Company (India) Limited against Punjab National Bank to which PKH Ventures Limited is a party. Any such proceedings, or any adverse action as a result of such proceedings, may affect the reputation of its promoter and subsequently that of the company`s business.

Most agreements that the company has entered into in connection with its business contain a penalty or liquidated damage clause for delay in the completion of a project that takes effect should the completion of a project be delayed.

Its may be subject to liability claims or claims for damages or termination of contracts with Developers for failures to meet project completion timelines or defective work, which may adversely impact its profitability, cash flows, results of operations and reputation.

The company faces few challenges, weaknesses and threats relating to its industry/sector and the company products/services.

Its actual cost in executing its contracts may vary substantially from the assumptions underlying its estimates. The company may be unable to recover all or some of the additional costs and expenses, which may have a material adverse effect on its results of operations, cash flows and financial condition.

Failures to obtain new contracts or its current contracts are terminated or face delays in commencement.

The Company has completed many projects since inception, but misplacement or loss of documents has occurred during operations, posing challenges in managing and evaluating completed projects, potentially impacting legal compliance.

The company requires certain approvals and licenses in the ordinary course of business. Any failures to successfully obtain/renew/update such registrations may adversely affect its operations, results of operations and financial condition.

Its business is subject to seasonal fluctuations.

The company is subject to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact its results of operations.

Its business is exposed to various implementation risks and other uncertainties which may adversely affect the company`s business, results of operations and financial condition.

Its operations may be adversely affected in case of industrial accidents, physical hazards and similar risks at its construction sites, which could expose it to material liabilities, loss in revenues and increased expenses.

Its insurance cover may not adequately protect the company against all material accidents. Its may face significant financial and operational losses if the company is not able to recover its insurance claims in the event of any such untoward material accident. Further, the company insurance cover may not be adequate or its may incur uninsured losses or losses in excess of the company insurance coverage.

Non-availability of documents pertaining to business advances.

The company does not have proof of payment of stamp duty on issuance/allotment of securities.

The company presently does not own the trademark or logo under which the company currently operate and if third parties infringe the trademark, logo and intellectual property that the company use, its business and reputation would be adversely affected.

The company has experienced rapid growth in the past few years and if the company is unable to sustain or manage its growth, the company cash flows, results of operations and financial condition may be adversely affected.

Its success largely depends upon the services of the company Directors, Senior Management Personnel and other Key Managerial Personnel and its ability to attract and retain them. Demand for them in the industry is intense and its inability to attract and retain them may affect the operations of the Company.

The average cost of acquisition of Equity Shares by the Promoters (also the Selling Shareholders) may be less than the Offer Price.

Its Promoter, some of the company Promoter Group members, Senior Management Personnel, Key Managerial Personnel and Directors are interested in the Company in addition to their normal remuneration and reimbursement of expenses incurred.

Its Promoter and Promoter Group will continue to retain significant control in the Company after the Offer, which will allow them to influence the outcome of matters submitted to shareholders for approval. Further, the company is dependent on the benefits derived from its relationship with its Managing Director and Chairman and the company`s business and growth may decline if its cannot benefit from this relationship in future. Such a concentration of ownership and benefit may also have the effect of delaying, preventing or deterring a change in control.

Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures and are also prohibited by the terms of its financing arrangements.

Certain of its Group Companies have incurred losses in the three fiscal years ended March 31, 2023.

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

The requirements of being a listed company may strain its resources.

The company is exposed to the risks of significant breaches of data security, and malfunctions or disruptions of information technology systems.

Changes in technology may affect its business by making the company construction capabilities less competitive or obsolete.

The company is subject to guidelines issued to by the Brihanmumbai Municipal Corporation regarding the steps to be taken for control of pollution failing which its may be subject to penalties, fines or even stoppage of construction activity.

Certain sections of this Red Herring Prospectus contain information from the Company Commissioned CareEdge Report, which has been exclusively commissioned and paid for by it, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks. Further, there can be no assurance that third-party statistical, financial and other industry information mentioned in the Company Commissioned CareEdge Report is complete, reliable or accurate.

If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.

Corrupt practices or improper conduct may delay the development of a project and materially and adversely affect its results of operations.

Covid-19 has had a considerable impact and could continue to affect its business.