AVP Infracon

Risks

• Its entire revenue stream is derived from activities within the state of Tamil Nadu. Any unfavorable developments that may impact its operations in this region could have negative consequences on its business, financial health, and operational results.

• The company lack ownership of the registered office used by the company. Any interference with its entitlements as the licensee/lessee or the cancellation of contracts with its licensors/ lessors could have a negative effect on its activities and, as a result, the company overall business.

• Its business demands substantial working capital, and any delays in securing the necessary funds could negatively affect its financial performance.

• The Company has reported negative cash flows from its operating, investing, and financing activities. Any operating losses or negative cash flows in the future could adversely affect its results of its operations and financial condition.

• The company`s main source of revenue comes from projects in India that are initiated or approved by government authorities and other organizations funded by the Government of India (GoI) or state governments. The majority of its income comes from agreements with a small number of government entities. If there are unfavorable changes in the policies of the central or state government, it could result in the closure, termination, restructuring, or renegotiation of its contracts, potentially impacting its business and financial performance significantly.

• Its business, growth prospects and financial performance largely depends on the company`s ability to obtain new contracts, and there is no assurance that its will be able to procure new contracts.

• Infrastructure projects are generally assigned to our organization upon fulfillment of specified pre-qualification prerequisites and subsequent engagement in a competitive tendering procedure. Any failure to secure new infrastructure projects or premature termination of contracts awarded to it could potentially have adverse repercussions on both its business operations and financial standing.

• Its projects face various implementation and other uncertainties, such as the risks of exceeding planned time and cost, which could have negative effects on its business, financial health, operational results, and overall prospects.

• The company utilizes several credit facilities provided by the bank, and in accordance with the sanctioned terms, certain restrictive covenants are imposed on the company. If the company is unable to obtain approval, it might restrict its scope of activities and obstruct its growth plans.

• The company`s lenders have charge over its movable properties in respect of finance availed by the company.

• As an integral aspect of its business operations, it is necessary for it to provide bank guarantees. Failing to secure these guarantees or the activation of such guarantees has the potential to negatively impact its cash flows and financial standing.

• Projects executed in collaboration through joint ventures may experience delays due to the performance of the joint venture partner. Additionally, substantial losses incurred from the joint venture have the potential to adversely impact its business, operational outcomes, and financial standing.

• The success and financial viability of its enterprise are markedly contingent on the performance and prevailing conditions within the construction and infrastructure sector, both at a nationwide level in India and, more specifically, within the Tamil Nadu Region. As a result, the company is subject to inherent risks stemming from economic fluctuations, regulatory alterations, and other dynamic changes, alongside the potential impact of natural disasters in the region. These factors collectively pose a potential threat to its business stability, operational outcomes, cash flows, and overall financial health.

• Currently, the company does not possess ownership of the trademark or logo by which its operations are presently identified. In the event of third-party infringement on the trademark, logo, or intellectual property the company utilize, it could have an adverse impact on its business and reputation.

• There are certain discrepancies noticed in some of its corporate records relating to forms filed with the Registrar of Companies.

• The company is bound by a spectrum of legal statutes and regulatory frameworks, encompassing environmental, health, and safety mandates. Non-compliance with these laws or failure to secure, sustain, or renew the requisite licenses, permits, and approvals essential for its business operations may result in adverse impacts on the company`s business, operational outcomes, and financial standing.

• There are certain discrepancies and non- compliances noticed in some of its financial reporting and/or records relating to filing or returns and deposit of statutory dues with the taxation and other statutory authorities.

• The prosperity of its business may be compromised if the company does not stay abreast of technological advancements within the construction industry.

• The company has engaged in specific transactions with related parties, and both these transactions and any prospective dealings with its related parties may present potential conflicts of interest.

• The company has unsecured loans from directors, relatives of directors, and other individuals, which are subject to repayment on demand. The issuance of repayment demands by these lenders has the potential to adversely impact its business operations.

• The company cannot provide a guarantee that its construction projects or work sites will be entirely free from defects.

• Its business involves significant capital requirements. In the event of insufficient cash flows to fulfill essential debt obligations and meet working capital needs, there may be an adverse impact on its operational results.

• The company may encounter challenges in effectively overseeing the expansion of its operations and implementing the company`s growth strategies, potentially leading to adverse effects on its business, financial condition, operational results, and future prospects.

• Projects listed in its order book, as well as its prospective ventures, are susceptible to delays, alterations, or cancellations due to factors beyond its control. Such occurrences have the potential to impact its business, prospects, reputation, profitability, financial condition, and operational results significantly and adversely.

• The average cost of acquisition of Equity Shares by its Promoters is lower than the issue price.

• The company is dependent on its Promoters, the company senior management and other key personnel, and the loss of, or its inability to attract or retain, such persons could affect its business, results of operations, financial condition and cash flows.

• The company possess an extensive inventory of equipment and maintain a sizable workforce, leading to elevated fixed expenditures for its organization. Should the company encounter challenges in generating sufficient cash flows, it could potentially exert a significant adverse influence on its operational activities.

• Its projects requires deployment of labour and depends on availability of labour. In case of unavailability of such labour, its business operations could be affected.

• The company`s operations are subject to physical hazards and similar risks that could expose its to material liabilities, loss in revenues and increased expenses.

• Its operations relies on third-party transportation providers for the timely delivery of raw materials from its suppliers and the efficient distribution of the company products to clients. Any failure on the part of these service providers to fulfill their obligations may significantly impact its business, financial condition, and operational results.

• Substantial rises in the costs, scarcity, or delays in the availability of labor and essential building materials may impact its projected construction expenses and timelines, potentially leading to cost overruns and reduced profitability.

• The company depends on the services of external third-party service providers and contractors to carry out specific components of its projects. Any failure on their part to fulfill their contractual obligations could have adverse implications for its business, operational results, and cash flows.

• Inadequate inventory management may adversely impact our net sales, profitability, cash flow, and liquidity.

• The company Promoters, Directors, and Key Managerial Personnel may hold interests in the Company beyond the reimbursement of expenses or regular remuneration.

• The divestment of shares by its promoters or other major shareholder(s) has the potential to negatively impact the market value of the Equity Shares.

• Its success depends on the company`s ability to attract and retain its key management personnel. If the company is unable to do so, it would adversely affect its business and results of operations.

• The extent of its insurance coverage may not be sufficient to mitigate all conceivable losses that could potentially affect it. Such inadequacy may impart a material impact on its business and financial condition.

• Its projects are exposed to various implementation and other risks, including risks of time and cost overruns, and uncertainties, which may adversely affect its business, financial condition, results of operations, and prospects.

• The company function within a fiercely competitive landscape and may encounter challenges in sustaining its market position, potentially leading to adverse effects on its business, operational results, and financial standing.

• The company does not have a designated monitoring agency, and the allocation of funds is subject to the discretion of its Management and Board of Directors, with oversight by its Audit Committee.

• The issue price of the Equity Shares may not necessarily reflect the future market price of its equity shares post-issue, and there exists the possibility that the market price of its Equity Shares may fall below the issue price.

• The ongoing success of its operations is significantly reliant on the continued contributions, strategic guidance, and financial support from its Promoter and Senior Management.

• The potential for future dividend payments relies on its forthcoming earnings, financial health, cash flows, working capital needs, and capital expenditure considerations.

• Adverse impacts on its operations may arise from occurrences such as strikes, work stoppages, heightened wage demands from its employees, or any other form of disputes with the company`s workforce.

• After the issuance, its Promoter and members of the Promoter Group will collectively maintain predominant control over the company, providing them with the authority to influence the outcomes of matters presented for shareholder approval.

• The company has not conducted independent verification of specific data presented in this Draft Red Herring Prospectus.

• 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.

• Its funding needs and the intended utilization of the Net Proceeds are derived from management estimates and have not undergone independent appraisal. These projections may be subject to alteration due to various factors, some of which are beyond itsr control.

• The Company is yet to place orders for purchase of plant and machinery. Any delay in placing orders or procurement of such plant and machinery may delay the schedule of implementation and possibly increase the cost of commencing operations.