Desco Infratech Ltd IPO

The company has certain outstanding litigation against it, an adverse outcome of which may adversely affect the company business, reputation and results of operations.

If the company fails to qualify for, or win new work orders from its clients, the company business, financial condition, results of operations, prospects and cash flows could be adversely affected.

The company is highly dependent on certain key customers for a substantial portion of its revenues. Loss of relationship with any of these customers may have a material adverse effect on its profitability and results of operations.

Its revenues from projects are difficult to predict and are subject to seasonal variations.

The Company had negative cash flows in the past years, details of which are given below. Sustained negative cash flow could impact its growth and business.

The company generate its major portion of sales from its operations in certain geographical regions especially, Gujarat, Haryana, Uttar Pradesh and Punjab. Any adverse developments affecting its operations in these regions could have an adverse impact on the company revenue and results of operations.

The Company has entered into related party transactions in the past and may continue to enter into related party transactions in the future, which may potentially involve conflicts of interest with the equity shareholders.

The Company is yet to place orders for 100% of the purchase of machineries, as specified in the Objects of the Issue. Any delay in placing orders, procurement of the same may delay its implementation schedule and may also lead to increase in price of these machineries, further affecting its revenue 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.

Majority of its Revenue from operation is derived from the company city gas distribution network projects and Operations and maintenance services. Any disruption in the continuous operations of its services would have a material adverse effect on the company business, results of operations and financial.