Lakshya Powertech Ltd

Risks

• Its projects are awarded through the competitive bidding process by government authorities/bodies and Private Companies. The company may not be able to qualify for, compete and win future projects, which could adversely affect its business and results of operations.

• The company relies on its in-house designing and engineering team for project execution. Loss of employee(s) may have an adverse effect on the execution of its projects.

• Its Registered Office, Corporate Office and Workshop from where the company operates is not owned by it.

• Delays in the completion of current and future projects could lead to payment of liquidated damages for its engineering, procurement, construction and Commissioning ("EPCC"), which could have an adverse effect on its cash flows, business, results of operations and financial condition.

• Increase in the prices of raw materials and labour could have an adverse effect on its business, results of operations and financial condition.

• The Company, its Directors and its Promoters are party to certain litigation and claims. These legal proceedings are pending at different levels of adjudication before various forums and regulatory authorities. Any adverse decision may make it liable to liabilities/penalties and may adversely affect its reputation, business and financial status.

• Its actual cost in executing Projects may vary substantially from the assumptions underlying its bid or 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.

• Its business is working capital intensive. If the company experience insufficient cash flows to meet required payments on its working capital requirements, there may be an adverse effect on the results of its operations.

• The company has had negative cash flows from Operating, investing and financing activities in the past and a consequent net decrease in cash and cash equivalents in some of the recent years.

• The Company is dependent on a few suppliers for purchases of products. The loss of any of these large suppliers may affect our business operations.

• The Company has in the past not complied with the certain provisions of the Companies Act, 2013.

• Its majority of directors does not have any prior experience of directorship of any listed entity.

• The company has projects in diverse geographical regions which may expose it to various challenges.

• An inability to comply with repayment and other covenants in the financing agreements or otherwise meet its debt servicing obligations could adversely affect the company`s business, financial condition, cash flows and credit rating.

• The Company has availed certain unsecured loans.

• Its business is dependent on a few of the company clients who contribute to significant of its revenues from operations. Any loss of business from them may adversely affect its revenues and profitability.

• The company failures to perform in accordance with the standards prescribed in work order of its client could result in loss of business or compensation payment.

• Any non-compliance or delays in GST Return Filings may expose it to penalties from the regulators.

• Any non-compliance or delays in EPF Return Filings may expose it to penalties from the regulators.

• Its Promoters have extended personal guarantees with respect to various loan facilities availed by the Company. Revocation of any or all of these personal guarantees may adversely affect its business operations and financial condition.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and any bank or financial institution or any independent agency has not appraised the same. The deployment of funds in the project is entirely at its discretion, based on the parameters as mentioned in the chapter titles "Objects of the Issue".

• Its individual Promoters plays key role in the company functioning and its heavily relies on their knowledge and experience in operating its business and therefore, it is critical for the company`s business that its Promoter and Executive Directors remain associated with it. The company`s success also depends upon the services of its key managerial personnel and the company ability to attract and retain key managerial personnel and its inability to attract them may affect its operations.

• Its projects requires deployment of labour and depend on availability of labour. In case of unavailability of such labour, its business operations could be affected.

• The Company has failed to comply with certain provisions of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) w.r.t supplier, however interest payments provisions for delayed payments for the year ended March 31, 2024 have been created.

• Qualified Audit Report has been issued by Statutory Auditor for the Restated Financial Statement.

• Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.

• The Company has applied for registration of the trademarks in its name. Until such registration is granted, its may not be able to prevent unauthorised use of such trademarks by third parties, which may lead to the dilution of its goodwill.

• Its operations heavily relies on manpower, and any issues such as employee unavailability, strikes, work stoppages, increased wage demands, or changes in regulations concerning could negatively affect its operational results impacting the company sales.

• The company has in the past entered into related party transactions and may continue to do so in the future.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the issue price.

• The Company is subject to foreign exchange control regulations and foreign currency transactions which can pose a risk of currency fluctuations.

• Its ability to pay any dividends will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• The deployment of funds raised through this Offer shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• Its inability to collect receivables and defaults in payment from the company customers could result in the reduction of its profits and affect the company cash flows.

• The company operates within a regulatory framework governed by stringent labour laws which could potentially impact its operations.

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

• The Company`s management will have flexibility in utilizing the Net Proceeds from the Issue. The deployment of the Net Proceeds from the Issue is not subject to any monitoring by any independent agency.

• Further, pursuant to Section 27 of the Companies Act 2013, any variation in the objects would requires a special resolution of the Shareholders and its Promoters or controlling Shareholders will be required to provide an exit opportunity to the Shareholders of the Company who do not agree to such proposal to vary the objects, in such manner as may be prescribed in future by the SEBI.

• The company has issued Equity Shares during the last one year at a price that may be below the Issue Price.

• The requirements of being a public listed company may strain its resources and impose additional requirements.

• Its insurance coverage may not be adequate to protect the company against all potential losses to which its may be subject and this may have a material effect on the company`s business and financial condition.

• The company has not independently verified certain data in this Red Herring Prospectus.

• Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

• The company will continue to be controlled by its Promoter and Promoter Group after the completion of the Issue, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

• Any future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of the company Equity Shares.

• Its inability to effectively implement the company`s business and growth strategy may have an adverse effect on its operation and growth.

• In the event there is any delay in the completion of the Issue, or delay in schedule of implementation, there would be a corresponding delay in the completion of the objects of this offer which would in turn affect its revenues and results of operations.

• There are restrictions on daily 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.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the Emerge Platform of National Stock Exchange of India Limited in a timely manner, or at all.

• Failures or disruption of its IT and/or ERP systems may adversely affect the company`s business, financial condition, results of operations and prospects.

• The Company operation and growth is dependent upon successfully implementation its business strategies.

• The company cannot assure you that its Equity Shares will be listed on the NSE EMERGE in a timely manner or at all, which may restrict your ability to dispose of the equity shares.

• Any future issuance of Equity Shares or convertible securities, including options under any stock option plan or other equity linked securities may dilute your shareholding, and significant sales of Equity Shares by its major shareholders, may adversely affect the trading price of the company Equity Shares.

• There are restrictions on daily 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.

• 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 its Equity Shares may not be indicative of the market price of its Equity Shares after the Issue and the market price of the company 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.

• QIBs 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 a Bid and Retail Individual Investors are not permitted to withdraw their Bids after Bid/Offer Closing Date.

• Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

• Delay in raising funds from the IPO could adversely impact the implementation schedule.

• The company propose to utilize the Net Proceeds for purposes identified in the section titled "Objects of the Issue" in this Red Herring Prospectus. Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders" approval.

• You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.