Corona Remedies Ltd

Risks

• The therapeutic areas of women`s healthcare, cardio-diabeto and pain management contributed to an aggregate of Rs.2,257.26 million (or 65.14%) and Rs.7,465.54 million (or 62.40%) of our revenue from operations for the three months ended June 30, 2025 and the Financial Year 2025, respectively. If our products in these or other therapeutic areas which contribute significantly to our revenue from operations do not perform as expected or if competing products become available and gain wider market acceptance, our business, results of operations, financial condition and cash flows may be adversely affected.

• Our 27 "engine" brands (and in particular, our B-29 and Myoril brands) accounted for 72.34% of our domestic sales during the MAT June 2025 period, and any adverse developments affecting the sales of our "engine" brands could have an adverse effect on our business, results of operations, financial condition and cash flows.

• We derive a significant majority of our revenue from our operations within India (constituting 96.34% and 96.33% of our revenue from operations during the three months ended June 30, 2025 and the Financial Year 2025, respectively). In the event of a fall in demand for our products in India, or if we fail to successfully expand into international markets, our business, results of operations, financial conditions and cash flows may be adversely affected.

• A significant portion of our domestic sales are concentrated in the states of Gujarat, Maharashtra, Chhattisgarh, Goa and Madhya Pradesh (accounting for 47.30% of our domestic sales for MAT June 2025). Any adverse developments affecting our sales in these regions could have an adverse effect on our business, results of operations, financial condition and cash flows.

• 70.10% of our domestic sales for MAT June 2025 were derived from chronic and sub-chronic therapeutic segments, which are subject to risks and uncertainties that could adversely affect our business, results of operations, financial condition and cash flows.

• We depend on third-party suppliers to procure our raw materials and finished goods, with whom we do not have long term contracts, with our total purchases aggregating to 19.87% and 27.96% of our total expenses for the three months ended June 30, 2025 and the Financial Year 2025, respectively. Further, we rely on La Chandra Pharmalab Private Limited, our Associate and Group Company, for the supply of certain active pharmaceutical ingredients in our women`s healthcare therapeutic area. We cannot assure you that we will be in a position to fully control or direct the operations of such suppliers to ensure an uninterrupted supply of raw materials and APIs.

• As of June 30, 2025, with a portfolio of 71 brands, we held 194 registered trademarks, with 29 pending trademark applications and 67 opposed/ objected/ refused / abandoned trademarks under certain classes of trademarks. If we are unable to obtain trademarks for our products and brands or protect other proprietary information, our business, results of operations, financial condition and cash flows may be adversely affected.

• We are required to obtain, maintain or renew our statutory and regulatory licenses, permits and approvals required to operate our operations. If we fail to obtain, maintain or renew the required licenses, permits and approvals, it may adversely affect our business, results of operations, financial condition and cash flows.

• Proceeds from the Offer will not be available to us.

• As of June 30, 2025, we engaged 22 carrying and forwarding agents for the sale of our products across the regions in which we market our products, with our five largest C&F agents contributing to 43.30% and 44.35% of our revenue from operations for the three months ended June 30, 2025 and the Financial Year 2025. The loss of our C&F agents, the deterioration of their financial condition or prospects, a reduction in their demand for our products or our inability to maintain and increase the number of our arrangements for the distribution of our products could adversely affect our business, results of operations, financial conditions and cash flows.

• Any slowdown, breakdown or shutdown in our manufacturing operations may adversely affect our business, results of operations, financial condition and cash flows.

• Our manufacturing units are subject to periodic inspections and audits by regulatory authorities and any future non-compliance with manufacturing and quality control requirements may subject us to regulatory action, which may adversely affect our reputation, business, results of operations, financial condition and cash flows.

• Our success depends on our ability to develop and commercialize products in a timely manner. If our research and development efforts (with R&D costs constituting 1.76% and 1.23% of our total expenses for the three months ended June 30, 2025 and the Financial Year 2025, respectively) do not succeed or the products we commercialize do not perform as expected, this may affect our business and the introduction of new products, and may adversely affect our business, results of operations, financial condition and cash flows.

• For the three months ended June 30, 2025 and the Financial Year 2025, our capacity utilization for tablets and capsules at our Bhayla Manufacturing Facility was 92.30% and 93.58%, respectively, while our capacity utilization for dry powder (sachets) at such facility was 56.00% and 94.60%, respectively. Similarly, during such periods, our capacity utilization for tablets and capsules at our Solan Manufacturing Facility was 113.36% and 96.05%, respectively, and capacity utilization for liquid (bottles) at such facility was 35.20% and 74.50%, respectively. An inability to maintain or improve our capacity utilization levels at our manufacturing facilities could have an adverse effect on our business, results of operations, financial condition and cash flows.

• The industry we operate in is highly competitive and if we do not respond adequately to the increased competition we expect to face, we may lose market share and our profits may decline, which may adversely affect our business, financial condition and results of operations.

• We do not maintain product liability insurance and may be subject to product liability claims and other adverse developments with respect to our molecules, which could adversely affect our business, results of operations, financial condition and cash flows.

• There are outstanding legal proceedings involving our Company, our Directors, our Key Managerial Personnel and Senior Management, and our Promoters. Any failure to successfully defend these proceedings may subject us to damages or remedies which may have an adverse effect on our business, reputation, results of operations, financial condition and cash flows.

• We rely on third party manufacturers for some of our finished products, which accounted for 37.25% and 35.99% of our total revenue from operations for the three months ended June 30, 2025 and the Financial Year 2025, respectively. Any adverse developments affecting such manufacturers could adversely affect our business, results of operations, financial condition and cash flows.

• We are exposed to government price controls which could negatively affect our results of operations.

• This Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, CRISIL Intelligence, a division of CRISIL Limited, which we have commissioned and paid for to confirm our understanding of our industry exclusively in connection with the Offer and reliance on such information for making an investment decision in the Offer is subject to inherent risks.

• Our Bhayla Manufacturing Facility and research and development centre co-housed within such facility are located in Ahmedabad, Gujarat (with such facility contributing to 34.29% and 34.93% of our revenue from operations for the three months ended June 30, 2025 and the Financial Year 2025, respectively) and we are exposed to risks originating from economic, regulatory, political and other changes in this region, including natural disasters and unforeseen circumstances, which could adversely affect our business, results of operations, financial condition and cash flows.

• Our business has grown significantly in the past, with revenue from operations growing at a compounded annual growth rate of 16.33% over the past three Financial Years and our Covered Market ranking within the Indian pharmaceutical market improving from 20 during MAT June 2022 to 17 during MAT June 2025. Our inability to successfully implement our business plan and strategies may have an adverse effect on our business, results of operations, financial condition and cash flows.

• We are dependent on third-party service providers for certain operations, such as transportation of raw materials, delivery of our finished products and hazardous waste management. An increase in prices by these third-party service providers or any disruption in their services may adversely affect our business, results of operations, financial condition and cash flows.

• We have significant capital expenditure requirements. If we experience insufficient cash flows to fund our capital requirements or if we are not able to procure additional capital on acceptable terms, our business, results of operations, financial condition and cash flows may be adversely affected.

• We have in the past entered into related-party transactions and may continue to do so in the future.

• We depend on opportunistic acquisitions of businesses and brands for the growth of our business and the unsuccessful integration of any businesses or brands we acquire may result in operating difficulties or costly divestments, which may adversely affect our business, results of operations, financial condition and cash flows.

• There have been certain instances of delays in payment of statutory dues and filing of GST returns by our Company. Any further delays in payment of statutory dues may attract financial penalties and may adversely affect our business, financial condition, cash flows and results of operations.

• We rely on our field force of 2,671 medical representatives (as of June 30, 2025) to market and distribute our products in India, and any failure to retain, train, motivate or manage them effectively could adversely affect our business, results of operations, financial condition and cash flows.

• We have incurred losses in the past due to a change in our distribution model and the recurrence of losses in future periods could have an adverse effect on our business, results of operations, financial condition, cash flows and the trading price of our Equity Shares.

• We rely on doctors to prescribe our products to patients, and any loss of their confidence, preference, or loyalty could adversely affect our sales and market share.

• We may be subject to impairment of goodwill and other intangible assets, including brands acquired by us, which could increase our amortization costs and adversely affect our financial condition.

• We are subject to extensive government regulation in India and failure to comply with such regulations may result in penalties, criminal sanctions, suspension of our business license, among others, and our business, results of operations, financial condition and cash flows may be adversely affected.

• Our inventories as a percentage of our total current assets as of June 30, 2025 and as of March 31, 2025, 2024 and 2023 were 29.08%, 38.21%, 33.92% and 36.16%, respectively. Our inability to accurately forecast demand for our products and manage our inventory may have an adverse effect on our business, financial condition, results of operations and cash flows.

• We are exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments, which may adversely affect our business, results of operations, financial condition and cash flows.

• We may encounter delays in the operationalization of our hormone manufacturing facility in Ahmedabad, Gujarat.

• We lease our Registered and Corporate Office in Ahmedabad, Gujarat and our manufacturing facility situated in Solan, Himachal Pradesh and are subject to risks arising out of non-ownership of such property.

• As of June 30, 2025, our total borrowings (current and non-current) aggregated to ?1,066.48 million. We may need additional capital for future growth of our business but may not be able to obtain such on favorable terms or at all.

• If our products are found to be infringing on the intellectual property rights of a third-party, we may be required to cease the sale of such the infringing products, causing loss of future sales revenue from such products and may also face liabilities for infringement of intellectual property rights, which may adversely affect our business, results of operations, cash flows and financial condition.

• We do not own certain brands that we promote and distribute under in-licensing arrangements. Any inability to commercialize these licensed brands or any disruptions or termination of our licensing agreements could adversely affect our business, results of operations, financial condition and cash flows.

• If third parties on whom we rely for clinical trials and bioequivalence studies do not perform their obligations as contractually required or as we expect, and do not comply with applicable regulations, we may not be able to obtain regulatory approval for or commercialize our products.

• The availability of counterfeit drugs, such as drugs passed off by others as our products, could adversely affect our goodwill, thereby affecting our business, results of operations and financial condition.

• Our business, results of operations and financial condition may be adversely affected if we are unable to enhance or maintain the reputation and image of our brands.

• Our success depends on our ability to retain and attract qualified senior management and other key personnel and medical representatives and if we are not able to retain them or recruit additional qualified personnel, we may be unable to successfully develop our business.

• Our inability to meet our obligations, including financial and other covenants under our debt financing arrangements could adversely affect our business, financial condition, cash flows and results of operations.

• Non-compliance with and changes in environmental, health and safety, and labor laws and other applicable regulations may adversely affect our business, financial condition, results of operations and cash flows.

• If any of our products cause, or are perceived to cause, severe side effects, our business, financial condition, cash flows and results of operations could be adversely affected.

• We are unable to trace some of our historical records including forms filed with the RoC and there have been certain discrepancies in our filings with the RoC.

• We are subject to the risk of loss due to fire, accidents and other hazards as our R&D and manufacturing processes, raw materials and finished goods are highly flammable and hazardous. We are also subject to the risk of other natural calamities or general disruptions affecting our manufacturing facilities and C&F agent locations.

• Our operations are labour intensive, and we may be subject to strikes, work stoppages or increased wage demands by our employees, which could adversely affect our business, results of operations and financial condition.

• Delay or failure in the performance of our contracts or purchase orders with our customers for supply of our products, whether on our part or on the part of C&F agents, may adversely affect our business, financial condition and results of operations.

• Our international operations expose us to complex management, legal, tax and economic risks, which may adversely affect our business, financial condition and results of operations.

• We may not be able to detect or prevent fraud or other misconduct committed by our medical representatives, employees or third parties.

• We currently rely extensively on our systems including information technology systems and products processing/quality assurance systems and their failure could adversely affect our business operations.

• Our insurance coverage may not be sufficient or adequate to cover our losses or liabilities. As of June 30, 2025, we had an insurance coverage as a percentage of total tangible assets of 155.11% of our total tangible assets. If we suffer a large uninsured loss or if we suffer an insured loss that significantly exceeds our insurance coverage, our financial condition and results of operations may be adversely affected.

• We appoint contract labour for carrying out certain of our operations and we may be held responsible for paying the wages of such workers if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on our financial condition, results of operations and cash flows.

• Our Promoters and the members of our Promoter Group will be able to exercise significant influence and control over us after the Offer and may have interests that are different from or conflict with those of our other shareholders.

• Our Promoters, certain of our Directors, Key Managerial Personnel and Senior Management may be interested in our Company other than in terms of remuneration and reimbursement of expenses.

• We are currently entitled to certain tax incentives and export promotion schemes. Any decrease in or discontinuation in policies relating to tax, duties or other such levies applicable to us may affect our results of operations.

• We may face risks on account of not meeting our export obligation for our Indian operations. Our failure to fulfill our export obligations in full may make us liable to pay duty proportionate to unfulfilled obligation along with interest.

• Introduction of stricter norms regulating marketing practices by pharmaceutical companies could affect our ability to effectively market our products, which may have an adverse effect on our business, results of operations and financial condition.

• Certain Non-GAAP financial measures and other statistical information relating to our operations and financial performance have been included in this Red Herring Prospectus. These Non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable with those presented by other companies.

• Information relating to the installed manufacturing capacity, actual production and capacity utilization of our manufacturing facilities included in this Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.

• Our ability to pay dividends in the future will depend on our earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of our financing arrangements.

• We are exposed to the risk associated with engaging with government institutions as part of our overseas business.

• There may be decline in the value of our investment made in our Associate.