Karamtara Engineering Limited IPO

The company is significantly dependent on its manufacturing facilities. Any unscheduled, unplanned or prolonged disruption, slowdown or shutdown of its manufacturing facilities could have a material adverse effect on its business, financial condition, cash flows and results of operations. Further, the majority of its manufacturing facilities are located in Maharashtra in India. Its revenue attributable to the company facilities in Maharashtra, India accounted for 98.80% and 99.18% of its total revenue from operations in the six months ended September 30, 2024 and Fiscal 2024, respectively which exposes its operations to potential risks arising from local and regional factors which may restrict its operations and adversely affect the company business, financial condition, cash flows and results of operations.

The company derives a substantial portion of its revenue from the sale of products in the solar industry (83.41% and 81.75% of its total revenue of operations in the six months ended September 30, 2024 and Fiscal 2024, respectively), and any adverse trend in the solar energy industry could have a material adverse effect on its business, financial condition, cash flows and results of operations.

The company depend on certain key customers for a significant portion of its revenues (the company top 10 customers contributed to 53.91% and 63.47% of its total revenue from operations in the six months ended September 30, 2024 and Fiscal 2024, respectively). Any decrease in revenues from any of its key customers or any loss of these customers may adversely affect the company business, financial condition, cash flows and results of operations.

The company derives a significant portion of its revenue from operations from exports (47.33% and 57.56% of the company total revenue from operations in the six months ended September 30, 2024 and Fiscal 2024, respectively) which exposes it to risks inherent to operations in these foreign jurisdictions. Any adverse developments in the international markets that the company operate or intend to expand to, including but not limited to foreign currency exchange rate fluctuations, could have an adverse effect on its business, financial condition, cash flows and results of operations.

Its operations are subject to volatility in the supply and pricing of raw materials and components. The company is dependent on its suppliers (its top 10 suppliers contributed to 81.65% and 76.00% of total purchases in the six months ended September 30, 2024 and Fiscal 2024, respectively) for certain raw materials and components and if the company is unable to procure the required quality and quantity, at competitive prices, its business, financial condition, cash flows and results of operations may be adversely affected.

The company does not execute long-term agreements with most of its customers and the company inability to procure new orders on a regular basis or at all may adversely affect its business, financial condition, cash flows and results of operations.

The company is in the process of undertaking certain expansion activities and intend to continue to do so in the future, which may not materialize as expected or at all which in turn may have an adverse impact on its business and financial condition. Further, an inability to grow its business in additional geographic regions or international markets, including pursuant to any failure or delay in implementing its expansion plans, could have an adverse impact on the company business, financial condition, cash flows and results of operations.

The company has incurred certain indebtedness and its inability to obtain further financing or meet the company obligations, including financial and other restrictive covenants under its debt financing arrangements could adversely affect the company business, financial condition, cash flows and results of operations. Further, the Company has availed unsecured loans from banks and other financial institutions, which may be recalled on demand.

Under-utilization of its manufacturing capacities and inability to effectively utilize the company expanded manufacturing capacities could have an adverse effect on its business, financial condition, cash flows and results of operations.

The company is subject to governmental regulation and its may incur material liabilities under, or costs in order to comply with, existing or future laws and regulation, and the company failures to comply may result in enforcements, recalls, and other adverse actions.