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The company has certain outstanding litigation against it, an adverse outcome of which may adversely affect its business, reputation and results of operations.
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The availability of raw material, i.e. waste paper is very crucial for its business activities.
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The company has received certain notices from the GST Department indicating huge discrepancies which may translate into Demand against it and potentially harming its business, reputation, and financial performance.
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The company highly depends on its major raw materials and a few key suppliers who help it procure the same. The Company has not entered into long-term agreements with its suppliers for the supply of raw materials. In the event the company is unable to procure adequate amounts of raw materials, at competitive prices its business, results of operations and financial condition may be adversely affected.
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The company conduct its business activities on a purchase order basis and therefore have not entered into long-term agreements with its customers.
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Its business is operating under various laws which require it to obtain approvals from the concerned
statutory/regulatory authorities in the ordinary course of business and its inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for its business operations could materially and adversely affect its business, prospects, results of operations and financial condition. The company requires a number of approvals, NOCs, licenses, registrations and permits in the ordinary course of its business. Some of the approvals are required to be obtained by its Issuer Company and any failures or delay in obtaining the same in a timely manner may adversely affect its operations.
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The company has entered into related party transactions in the past and may continue to do so in the future.
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The company is exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may adversely impact the results of operations.
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The Company has extended corporate guarantee to secure the debt facilities availed by its Wholly Owned Subsidiary.
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The company has certain contingent liabilities as on date of this Red Herring Prospectus that have not been provided for in the Company`s financials which if materialized, could adversely affect its financial condition.
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If the company cannot respond adequately to the increased competition its expect to face, the company will lose market share and its profits will decline, which will adversely affect the company`s business, results of operations and financial condition.
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Some of its corporate records including forms filed with the Registrar of Companies are not traceable.
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Its lenders have imposed certain restrictive conditions on it under its financing arrangements. Under its financing arrangements, the company is required to obtain the prior, written lender consent for, among other matters, changes in its capital structure, formulate a scheme of amalgamation or reconstruction and entering into any other borrowing arrangement.
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Difference in the name mentioned in the KYC documents of its Promoters and/or Director.
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Its Group Companies i.e. Saradhambika Paper and Board Mills Private Limited, B.M.M. Paper Board Private Limited and Mayura Packaging Private Limited operate in a similar line of business to us, which may lead to conflict of interest.
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The Company has been referred to the National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016.
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Continued operations of its manufacturing facility are critical to its business and any disruption in the operation of the company`s manufacturing facility may have a material adverse effect on its business, results of operations and financial condition.
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Its Promoters and members of the Promoter Group will continue jointly to retain majority control over the Company even after the Issue which will allow them to determine the outcome of matters submitted to shareholders for approval.
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There are no alternate arrangements for meeting its requirements for the Objects of the Issue. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.
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Guarantees from Promoters as well as others have been taken in relation to the debt facilities provided to the company.
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The requirements of being a public listed company may strain our resources and impose additional requirements.
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Its subsidiary company Subam Paper and Boards Private Limited (SPBPL) has leased land, building and some of its machinery and licenses.
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Majority of its fund utilization is to invest in our wholly-owned subsidiary company Subam Paper and Boards Private Limited (SPBPL).
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Its wholly-owned subsidiary`s Registered Office and Factories are not onwed by the company wholly-owned subsidiary. The same is occupied by it on a lease basis. Disruption of its rights as lessee or termination of the agreement with lessor would adversely impact its operations and, consequently, its business.
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Its subsidiary company Subam Paper and Boards Private Limited (SPBPL) has applied for the factory license but has not received the same yet.
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Its wholly owned subsidiary have experienced losses in the past and may also experience in future.
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Majority of its revenue is dependent on two products i.e., Kraft Paper and Duplex Paper, if the company is unable to anticipate or adapt to evolving upgradation of products or inability to ensure product quality or reduction in the demand of such products may adversely impact its revenue from operations and growth prospects.
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The company generate its major portion of sales from its operations in certain geographical regions especially Tamil Nadu Any adverse developments affecting its operations in these regions could have an adverse impact on its revenue and results of operations.
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Its Solar Plants and Godown is not owned by the company. The same is occupied by it on a lease basis. Disruption of its rights as lessee or termination of the agreement with its lessor would adversely impact its operations and, consequently, its business.
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Its business involves usage of manpower and any unavailability of its employees or shortage of contract labour or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing contractual labour may have an adverse impact on its cash flows and results of operations.
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Brand recognition is important to the success of its business, and the company inability to build and maintain its brand names will harm its business, financial condition and results of operation.
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Its success depends in large part upon the company qualified personnel, including its senior management, directors and key personnel and its ability to attract and retain them when necessary.
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The company sell its products through network of dealers and any inability to expand or effectively manage its growing distribution and sales network may have an adverse effect on its business, results of operations and financial condition.
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The Company has a negative cash flow in its operating activities in the year 2022 and in its investing activities in the year 2024, 2023 and 2022 and in its Financing Activities in the year 2023, details of which are given below. Sustained negative cash flow could impact its growth and business.
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The Company had not made any provision for payment of gratuity to its employees as per relevant provision of Payment of Gratuity Act, 1972.
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Heavy dependence on its Promoters for the continued success of the company`s business through his continuing services, strategic guidance and support.
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As the company continue to grow, its may not be able to effectively manage its growth and the increased complexity of the company`s business, which could negatively impact its brand and financial performance.
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Any downgrade of its credit ratings would increase borrowing costs and constrain its access to capital and lending markets and, as a result, could adversely affect its business.
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Delay in delivery of the products due to breakdown of machinery.
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The company is dependent on third party vendors for delivery of materials required to it from its suppliers and delivery of the company products to its clients. Any failures on part of such vendors to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.
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The shortage or non-availability of power facilities may adversely affect its business and have an adverse impact on the company results of operations and financial condition.
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Major fraud lapses of internal control or system failures could adversely impact the company`s business.
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The company continue to explore the diversification of its business and the implementation of new products. These diversifications and its other strategic initiatives may not be successful, which may adversely affect its business and results of operations.
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Its inability to manage growth could disrupt the company business and reduce its profitability. The company propose to expand its business activities in coming financial years.
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The nature of its business exposes it to liability claims and contract disputes and its indemnities may not adequately protect it. Any liability in excess of its reserves or indemnities could result in additional costs, which would reduce its profits.
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Employee fraud or misconduct could harm it by impairing its ability to attract and retain clients and subject it to significant legal liability and reputational harm.
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Its operations may be adversely affected in case of industrial accidents at the company working sites.
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Its operating expenses include overheads that may remain fixed in the medium term. In case there is any decline in its operating performance, the company may be unable to reduce such expenses.
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The average cost of acquisition of Equity Shares by the Promoters may be less than the Issue Price.
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Its insurance coverage may not adequately protect the company against losses, and successful claims against it that exceed its insurance coverage could harm the company results of operations and diminish its financial position.
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The company ability to pay dividends in the future will depends upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.
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Any future acquisitions, joint ventures, partnerships, strategic alliances, tie-ups or investments could fail to achieve expected synergies and may disrupt its business and harm the results of operations and the company financial condition.
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Its future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by the company, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.
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Its KMP is associated with the company for less than one year.
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There is no guarantee that its Equity Shares will be listed on the Stock Exchanges in a timely manner or at all.
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The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.
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Negative publicity could adversely affect its revenue model and profitability.
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Industry information included in this 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.
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There are restrictions on daily/weekly/monthly movements in the price of the Equity Shares, which may adversely affect a shareholders` ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
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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.
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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.
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The Issue price of its Equity Shares may not be indicative of the market price of the company Equity shares after the issue.
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Sale of Equity Shares by its Promoters or other significant shareholder(s) may adversely affect the Trading price of the Equity Shares.
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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.
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The Issue price of our Equity Shares may not be indicative of the market price of our Equity shares after the issue.
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Sale of Equity Shares by our Promoters or other significant shareholder(s) may adversely affect the Trading price of the Equity Shares.
