Goyal Salt

Experienced management team and promoters with qualified workforce.

Established refining facility and integrated production with cost efficiencies.

Strong and consistent financial performance.

Focus on quality and safety.

Long and strong relationship with customers and dealers and efficient supply chain management.

Cordial relationship between management and labour.

The company`s Refining unit is located in Rajasthan and exposed to various regulatory and other geographical risks such as weather and natural occurrence as well as regulatory, economic, demographic and other changes in the state of Rajasthan or in India. In particular, excessive and non-seasonal rainfalls could deteriorate the quality and supply of the company principal raw material namely raw salt. This will adversely affect its business and financial conditions.

Its refining of salt process has 25.86%, 24.30% and 20.48% process loss during the year ending on March 31, 2023, 2022 and 2021. Any further increase in process loss will have severe effects on its operational costs, profit margins, and financial performance.

The company derives 68.47%, 60.35% and 50.84% of its revenue from top 10 customers during the fiscal ending on March 31, 2023, 2022 and 2021. If one or more of such customers choose not to source their requirement from it, the company business, financial condition and result of operation may be adversely affected.

The company has in the past entered into transactions with related parties and may continue to do so in the future. These or any future related party transactions may potentially involve conflicts of interest and there can be no assurance that the company could not have achieved better terms, had such arrangements been entered into with unrelated parties.

Insufficient water availability at its refining unit causes the increase in the company expenditure to meet the water requirements and thus reduces its profitability.

The Company requires significant amounts of working capital for continued growth. Its inability to meet the company working capital requirements may have an adverse effect on its results of operations. Further, failure to manage the company inventory could have an adverse effect on its sales, profitability, cash flow and liquidity.

The company does not have long term agreements with suppliers for its raw materials and packaging material and an increase in the cost of, or shortfall in the availability or quality of such raw materials and packaging material could have an adverse effect on its business, financial condition and result of operation.

The Restated Financial Statements have been provided by Peer Reviewed Chartered Accountants who is not Statutory Auditor of the Company.

There are pending litigations against the company and certain Directors and any adverse decision in these proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, result of operations and financial conditions.

Any negative publicity or defect in product quality may cause the Company substantial costs which in turn could adversely affect its goodwill and the sales could be diminished.

As per the orders of the Madhya Pradesh State Civil Supply Corporation, the company has been offered to supply the refined iodized salt to State Govt of Madhya Pradesh under PDS. In past the company has been offered to supply the refined iodized salt to State Govt of Uttar Pradesh, and Jharkhand under PDS. The company inability to meet the requirement could have an adverse impact on its reputation and attract penalties and also failure to get this offer in future could have an adverse effect on the company sales, profitability and cash flows.

The company`s refining capacities may not reach their installed capacity and its may also be unable to effectively utilize the company expanded refining capacities.

The company is subject to strict quality requirements, regular inspections and audits and sale of product depends on its quality control and standards. Any failure to comply with quality standards may adversely affect the company business prospects and financial performance, including cancellation of existing and future orders.

The company is dependent on third party transportation and logistics service providers. Any increase in the charges of these entities or unavailability of transportation services for its products or transportation strikes could adversely affect of the business, results of operations and financial conditions.

Properties, on which the company has the registered office and refining facilities, are not owned by it. Any termination or dispute in relation to this lease/ rental agreement may have an adverse effect on its business operations and results thereof.

The company has negative cash flow from operating activity, investing activity and financing activities in some of the previous years as per the restated financial statement.

Non-Compliance with and changes in safety, health and environmental laws and other applicable regulations may adversely affect its business, prospects, financial condition and results of operations. Further, the company may not be able to renew or maintain its statutory and regulatory permits and approvals required to operate the company business.

The industry in which its operate has many big players due to which the Company faces a lot of competition from them. This may affect its business operational and financial conditions.

The company reliance on three major products comprises the substantial sales and any factor affecting the sales of these major products could have an adverse effect on its business.

Delays or defaults in payments from the company customers could result in reduction of its profits.

The agreements governing the company indebtedness contain conditions and restrictions on its operations, additional financing and capital structure.

The company has certain contingent liabilities that have not been provided for in its financial statements, which if they materialise, may adversely affect of the financial condition, cash flows and results of operations.

There have been certain inadvertent inaccuracies, delay and non-compliances with respect to certain regulatory filings and corporate actions taken by the Company. Consequently, its may be subject to regulatory actions and penalties for any past or future non-compliance and the company business and financial condition may be adversely affected.

Failure to manage the company inventory could have an adverse effect on its net sales, profitability, cash flows and liquidity.

The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the Issue. Further the company has not identified any alternate source of financing the `Objects of the Issue`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

The company is dependent on machinery for its refining operations. Any unscheduled, unplanned or prolonged disruption or breakdown of the machinery could adversely affect the company business, financial results and growth prospects.

The company operations may be adversely affected in case of industrial accidents at any of the company refining facilities.

The company refining operations may be materially adversely affected by Strikes; work stoppages or increased wage demands by its employees or any kind of dispute with the employees could adversely affect of the business and results of operations.

The company`s success largely depends upon the continuing services, strategic guidance and financial support of the promoters, directors and the senior management as well its ability to attract and retain skilled personnel. Any loss of the directors, senior management or the company ability to attract and retain them and other skilled personnel could adversely affect of the business, financial condition and result of operations.

Employee misconduct, errors or fraud could expose it to business risk or losses which could adversely affect the company business prospect, result of operations and financial conditions.

Modernization and technology upgradation can render the existing technology and machinery redundant and obsolete.

The company is required to maintain certain licenses, approvals, registrations, consents and permits in the ordinary course of business. Failure to obtain the requisite approvals result in non-compliance and therefore, affect its business operations, financial condition, result of operations and prospects.

The company may not have sufficient insurance coverage to cover all possible losses.

Industry information included in this Draft Red Herring Prospectus has been derived from industry reports commissioned by it for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

The company`s Refinery unit is dependent on adequate and uninterrupted supply of electricity and fuel. Any shortage or non-availability of such essential utilities could lead to disruption in operations, higher operating cost and consequent decline in its operating margins.

The company inability to successfully implement some or all its business strategies in a timely manner or at all could have an adverse effect on the company business. Further, its inability to effectively manage any of these issues may adversely affect of the business growth and, as a result, impact its businesses, financial condition and result of operations.

Improper storage, processing and handling of materials and products may cause damage to the company inventory leading to an adverse effect on its business, results of operations and cash flows.

Any change in the government laws could affect the flow of the company operations and disrupt its business activities.

If the company is unable to source business opportunities effectively, its may not achieve of the financial objectives.

The company may not be successful in implementing its business strategies.

The average cost of acquisition of Equity Shares by the company Promoters could be lower than the floor price.

The Company may not completely utilise the Net Proceeds of the Issue for the objects stated in FY 2023-24 and FY 2024-25.

The company future funds requirements, in the form of issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

In addition to standard remuneration or benefits and reimbursement of expenses, some of the Promoters, Directors and key managerial personnel are interested in the Company to the extent of their shareholding, dividend entitlement and lease rent received, in the Company.

There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of the company Management and its Board of Directors, though it shall be monitored by the Audit Committee.

The company Promoters will continue jointly to retain majority control over the Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

There are restrictions on daily / weekly / monthly movements in the price of the Equity Shares, which may adversely affect a shareholder`s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Issue Price, or at all.

After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.

The Issue price of the company Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of the Equity Shares may decline below the Issue price and you may not be able to sell your Equity Shares at or above the Issue Price.

You will not be able to sell immediately on Stock Exchange any of the Equity Shares you purchase in the Issue until the Issue receives appropriate trading permissions.

QIB and Non-Institutional investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting the Bid.

Sale of Equity Shares by the company Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.