Asirvad Microfinance Limited IPO

Non-payment or default owing to the profile of borrowers in the microfinance industry, whom its service, may lead to increased levels of non-performing assets, related provisions and write-offs that may adversely affect its business, results of operations, cash flows and financial condition.

The quality of its portfolio may be impacted due to higher levels of non-performing assets ("NPAs") and its business may be adversely affected if the company is unable to create adequate provisions for such higher levels of NPAs.

Its business is vulnerable to interest rate risk. Volatility in interest rates for both lending and treasury operations could have an adverse effect on its net interest income and net interest margin, thereby affecting its results of operations and cash flows.

Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations, cash flows and financial condition.

The company requires substantial capital for its business and any disruption in its sources of capital could have an adverse effect on its business, results of operations, cash flows and financial condition.

Its may not be able to sustain or manage the company growth or execute its growth strategy for microfinance loans effectively. If its fail to increase its operational efficiency, the company may have higher operating costs and lower profitability and cash flows or operate its business effectively.

The company depends on the accuracy and completeness of information provided by its borrowers and certain third party service providers. Its reliance on any erroneous or misleading information may affect its judgement of their credit worthiness.

The company relies significantly on its information technology systems for the company's business and any inadequacy or security breach in such systems could adversely affect its results of operations, cash flows and reputation.

The company has received show cause notices and warning in the past for failure to implement an effective transaction monitoring and reporting system that creates alerts for suspicious or inconsistent transactions. Its inability to detect alerts for money-laundering and other illegal activities fully and on a timely basis may expose it to additional liability and adversely affect its business and reputation.

Its non-convertible debentures are listed on BSE and the company is subject to rules and regulations with respect to such listed non-convertible debentures. The company has had few instances of non-compliance in the past and if its fail to comply with such rules and regulations, its may be subject to certain penal actions, which may have an adverse effect on its business, reputation, results of operations, cash flows and financial condition.