Piotex

Risks

• The company is dependent on its vendors to procure its products and does not have any manufacturing facilities of its own. The company`s business is therefore dependent to a large extent on expected performance and operation of its vendor partners.

• The company face substantial competition in the textile business, both from Indian and international companies, which may adversely affect its revenues.

• Any increase in the prices of its raw material and any decrease in the supply of the company raw materials, primarily cotton, will materially and adversely affect its business, results of operations and financial condition.

• The company has entered into Sole selling and Job work Agreements with the various spinning units for manufacturing and trading the products. Any termination of such agreements may have adverse effect on its business, prospects, results of operations and financial condition.

• The company relies on outsourcing of its production processes and activities to third-parties. Any inability to obtain sufficient quantities of processed material of the requisite quality in a timely manner and at acceptable prices, or a slowdown, shutdown or disruption in such third parties` operations and performance, could adversely affect its business, results of operations and financial condition.

• Any failure in its quality control processes may have an adverse effect on the company`s business, results of operations and financial condition.

• Any failure on its part to effectively manage the company inventory may result in an adverse effect on its business, revenue from manufacturing operations and financial condition.

• Dependence upon third party transportation services for supply and transportation of its products are subject to various uncertainties and risks, and delays in delivery may result in rejection of products by customer.

• If the company is unable to procure raw materials, finished products and packing material of the required quality and quantity, at competitive prices, its business, results of operations and financial condition may be adversely affected.

• There are outstanding legal proceedings involving its Group Company. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.

• The property used by the Company for the purpose of its operations is not owned by it. Any termination of the relevant rent agreement in connection with such property or its failure to renew the same could adversely affect its operations.

• Its top ten customers contribute majority of our revenues from operations. Any loss of business from one or more of them may adversely affect its revenues and profitability.

• Its top ten suppliers contribute majority of its purchases. Any loss of business with one or more of them may adversely affect its business operations and profitability.

• There are certain discrepancies and non-compliances noticed in some of its financial reporting and/or records relating to filing of returns and deposit of statutory dues with the taxation and other statutory authorities.

• In case of its inability to obtain, renew or maintain the statutory and regulatory licenses, permits and approvals required to operate its business it may have a material adverse effect on its business.

• The company has a substantial amount of outstanding indebtedness, which requires significant cash flows to service and are subject to certain conditions and restrictions in terms of its financing arrangements, which restricts its ability to conduct its business and operations in the manner the company desire.

• If the company is not successful in managing its growth, its business may be disrupted and its profitability may be reduced.

• The unsecured loan availed by the Company from Directors may be recalled at any given point of time.

• The company has entered into and may enter into related party transactions in the future also.

• Its success is dependent on the company Promoter, senior management and skilled manpower. Its inability to attract and retain key personnel or the loss of services of its Promoter or Managing Director and Whole Time Directors may have an adverse effect on its business prospects.

• If there is a change in policies related to tax, duties or other such levies applicable to the company, it may affect its results of operations.

• The present promoter of the Company are first generation entrepreneurs.

• The company has applied for the registration of its logo but yet not get it registered. If its fail to obtain registration its brand building efforts may be hampered which might lead to adverse effect on its business.

• If the company is not able to successfully manage its growth, its business and results of operations may be adversely affected.

• The company has experienced negative cash flows in the past. Any such negative cash flows in the future could affect its business, results of operations and prospects.

• Its operations are subject to high working capital requirements. The company inability to maintain an optimal level of working capital required for its business may impact its operations adversely.

• Its marketing and advertising campaigns may not be successful in increasing the popularity of its products and offerings. If its marketing initiatives are not effective, this may adversely affect its business and results of operations.

• Its Promoter Group Entities are engaged in similar line of business. Any conflict of interest in future may occur between the business of its promoter group entities and it which may adversely affect its business, prospects, results of operations and financial condition.

• Misconduct or errors by manpower engaged by it could expose the company to business risks or losses that could affect its business prospects, results of operations and financial condition.

• Its operating results could be adversely affected by weakening of economic conditions due to lock-down in all parts of India and other parts of world due to pandemic covid-19, or similar unforeseen events.

• The company is subject to the risk of failure of, or a material weakness in, its internal control systems.

• Its business is substantially affected by prevailing economic, political and other prevailing conditions in India.

• Its Promoters and Executive Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

• The future operating results are difficult to predict and may fluctuate or adversely vary from the past performance.

• Orders placed by customers may be delayed, modified, cancelled or not fully paid by its customers, which may have an adverse effect on the company`s business, financial condition and results of operations.

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

• Its susceptible to risks relating to unionization of the company employees employed by it.

• Any Penalty or demand raise by statutory authorities in future will affect its financial position of the Company.

• The company has not identified any alternate source of raising the working capital mentioned as its `objects of the Issue`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• 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.

• Any variation in the utilization of the Net Proceeds as disclosed in this Draft Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• Portion of its Issue Proceeds are proposed to be utilized for general corporate purposes which constitute [*] of the Issue Proceed. As on date the company has not identified the use of such funds.

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

• The company has not paid any dividends in the last five Financial Years. Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• The company will continue to be controlled by its Promoters 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.

• Its operations are subject to environmental, health and safety laws and regulations.

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

• Deployment of the Proceeds is not subject to any monitoring by any independent agency. The purposes for which the Proceeds of the Issue are to be utilized are based on management estimates and have not been appraised by any banks or financial institutions.

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

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

• A third party could be prevented from acquiring control of the Company because of anti-takeover provisions under Indian law.

• The requirements of being a listed company may strain its resources and distract management.

• Its may require further equity issuance, which will lead to dilution of equity and may affect the market price of its Equity Shares or additional funds through incurring debt to satisfy its capital needs, which its may not be able to procure and any future equity offerings by it.