Saraswati

Diversified supplier and customer base.

Diverse product portfolio.

Bulk buying capabilities.

Experienced Promoters and strong management team.

Existing client and supplier relationships.

Collaborative and experienced work force.

The company`s business is highly concentrated on the sale of women`s sarees and is vulnerable to variations in demand. Any changes in consumer preference could have an adverse effect on its business, results of operations and financial condition.

The company operates out of two stores in Maharashtra which are located at Kolhapur and Ulhasnagar. Any localized social unrest, natural disaster or breakdown of services or any other natural disaster in and around Maharashtra or any disruption in production at, or shutdown of, its stores could have material adverse effect on the company`s business and financial condition.

The Company is operating in wholesale segment due to which its lack visibility and direct connection with the end consumers of the company`s products which may adversely affect its ability to build brand loyalty and awareness with the end consumers.

The company operates in highly competitive and fragmented industry with presence of large number of smaller unorganised players operating standalone outlets markets in each of its product segments and an inability to compete effectively may adversely affect its business, results of operations and financial condition.

Its business is subject to seasonality. Lower revenues in the festive period of any Fiscal may adversely affect the company`s business, financial condition, results of operations and prospects.

A significant portion of its sales are derived from the western zone and any adverse developments in this market could adversely affect its business.

The company is dependent on third party weavers /suppliers for sourcing its products. The company does not have longterm or exclusive agreements with its weavers/suppliers and its may not be able to procure sufficient quantity or quality of goods from its weavers/ suppliers in a timely manner and at an acceptable price and this may adversely affect the business, results of operations and financial conditions.

The Company being in the wholesale sector requires significant amount of working capital for a continued growth. Its inability to meet the company working capital requirements may have an adverse effect on its results of operations.

The company has experienced negative cash flows in relation to its operating, investing and financing activities in the last three financial years. Any negative cash flows in the future would adversely affect the company`s results of operations and financial condition.

If the company is unable to maintain an optimal level of inventory, its business, results of operations and financial condition may be adversely affected.

The company`s business is a high volume-low margin business. Due to this nature of its business, the company`s business, its profit and operating margins are low. Any sudden changes with respect to price movements in goods being traded or sudden ad hoc anomalies in business or operations could substantially affect its net bottom lines and hence, adversely affect the company`s results of operations and financial conditions.

Pricing pressure from its competitors may affect the company`s ability to maintain or increase its product prices and, in turn, the company`s revenue from product sale, gross margin and profitability, which may materially and adversely affect its business, cash flows, results of operations and financial condition.

If the company launch any new products which are not successful in the market as the company anticipate, its business, cash flows, results of operations and financial condition may be adversely affected.

There have been some instances of delayed filing with the Registrar of Companies and other noncompliances under the Companies Act in the past which may attract penalties.

The company is exposed to the risks associated with having taken real estate on leave and license basis. In case the current location of its stores become unattractive or in case the company is unable to comply with the terms and conditions of the license agreements then its may shift the company stores to new locations, which may adversely affect its business, cash flows, results of operations and financial condition.

Its may be subject to significant risks and hazards when operating and maintaining the company stores, for which its insurance coverage might not be adequate.

The company relies on third-party transportation providers for the transportation of its finished products and any disruption in such delivery or failures by third parties in transporting the products may adversely affect its operations.

Most of its Directors does not have any prior experience of being a director in any other listed company in India.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with its Shareholders.

The company has delayed in payments of certain statutory dues and have also paid interest and fees towards such delayed payments in the past.

Its inability to grow the business across emerging markets in India and effectively manage or expand its wholesale network may adversely impact the company`s business, results of operations and financial condition.

The company is subject to payment-related risks, including risks associated with cash payments, online payment mechanisms and payment processing risks.

The company engage contract labourers at its stores and any failures by the vendors from whom such contract labourers are engaged to pay wages or dues on time could subject it to financial liability, in turn adversely impacting its profitability and results of operations.

Its Directors, Promoters and members of the Promoter Group members may enter into ventures that may lead to real or potential conflicts of interest with the company`s business.

There may be outstanding litigations and regulatory proceedings by and against the Company, Directors and Promoters. Any adverse outcome from such legal proceedings may impact its reputation, business, cash flows, financial condition, and results of operations.

Unsecured loan of Rs. 378.39 million taken by the Company from related party can be recalled at any time.

The average cost of acquisition of Equity Shares by the Promoter Group Selling Shareholders may be less than the Offer Price.

Any failures in obtaining or renewing approvals, licenses, registrations and permissions for its stores to operate the company`s business in a timely manner, or at all, may adversely affect its business, financial conditions and results of operations.

The company may suffer from labour shortages, strikes, slowdowns, work stoppages and increased wage costs by its employees, weavers/suppliers and third-party suppliers or any other kind of disputes with its employees.

Its inability to effectively manage the company distribution channels may have an adverse effect on its business, results of operations and financial condition.

Its inability to accurately forecast demand or price for the company products and manage its inventory may adversely affect the company`s business, results of operations, financial condition and cash flows.

Its market presence in southern India is not proportionate to the industry norm.

The company may be subject to fraud, theft or such similar incidents which may have an adverse effect on its business operations and financial conditions.

The company inability to adapt with new technologies in its operations or technology failures or breach of data security could disrupt its operations and may adversely affect the company`s business and results of operations.

The Company will not receive any proceeds from the Offer for Sale portion and the Promoter Group Selling Shareholders shall be entitled to the Offer Proceeds to the extent of the Equity Shares offered by them in the Offer for Sale. Its Promoter Group members are therefore interested in the Offer in connection with the Equity Shares offered by them in the Offer for Sale.

After the completion of the Offer, its Promoters along with the Promoter Group will continue to hold majority of the shareholding of the Company, which may allow them to influence the outcome of matters submitted for approval of its Shareholders.

One of its Independent Directors was holding two DINs in the past.

The company is excessively dependent on its Promoters, Directors, Key Managerial Personnel and Senior Managerial Personnel, and the loss of, or its inability to hire, train and retain qualified personnel could adversely affect its business, results of operations, and financial condition.

The Company`s logo and some other trademarks are not registered as on date of this Red Herring Prospectus. However, applications for registration its trademarks have been filed with the trademarks authority. The company may be unable to adequately protect its intellectual property and/ or be subject to claims alleging breach of third-party intellectual property rights.

Change in customer preferences to purchase products from traditional brick and mortar stores to e-commerce may have an adverse impact on its business, results of operations and financial condition.

Its business operations are influenced by the geographical origin of sarees. Any adverse developments in this market could adversely affect its business.

The company does not manufacture any of its products and relies entirely on weavers/suppliers for the manufacturing of all the company`s products. Its dependence on third-party manufacturers for the manufacturing of all the company products subjects it to risks, which, if realized, could adversely affect its business, results of operations, cash flows and financial condition.

Its inability to identify and respond to changing consumer preferences from sarees to western wear and kurtis or evolving trends may decrease the demand for its products among the company customers, which may adversely affect its business.

The COVID-19 pandemic has had an adverse effect and any future pandemic may have adverse effects on its business, results of operations, financial condition and cash flows.

Its business activities are dependent on the delivery of adequate and uninterrupted supply of electrical power at a reasonable cost. Any shortage or any prolonged interruption or increase in the cost of power could adversely affect its business, result of operations, financial conditions and cash flows.

Industry information included in this Red Herring Prospectus has been derived from an industry report from CRISIL Market Intelligence & Analytics, a division of CRISIL Limited which has been commissioned and paid by it for such purpose exclusively in connection with the Offer.

Its Promoters, Directors, Key Managerial Personnel and Senior Managerial Personnel are interested in the Company`s performance in addition to their remuneration and reimbursement of expenses and there may be a potential conflict of interest of its Promoters or Directors against the interests of the Company.

The Company may not be able to pay dividends in the future as its ability to pay dividends in the future depends on the company`s future earnings, financial condition, cash flows, working capital requirements, capital expenditures and terms of its financing arrangements. The company cannot assure you that its will be able to pay dividends in the future.

In this Red Herring Prospectus, the company has included certain Non-GAAP ("Generally Accepted Accounting Principles") financial measures and certain other industry measures related to its operations and financial performance. These Non-GAAP measures and industry measures may vary from any standard methodology applicable across the Indian retailing industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

If the company is unable to protect the data related to electronic mode of payments, or any other personal information that the company collect from customers, its reputation could be significantly harmed.