DCG Cables

Risks

• The Company had avail dealer finance facility from SG Finserve Limited of Rs 300 lacs and the charge has been created on the current assets of the Company without getting the NOC from the State Bank of India who had sanctioned working capital limit against the current assets of the Company.

• The Company has not applied for the registration under PF and ESIC Act, though the same is applicable since FY 2021-22. Further the Company is irregular in depositing the Provident Fund and ESIC collected from the salary of employees and contribution by company with the respected Authorities as well as filing the return as per Acts.

• The company does not own registered office and its factory premises situated at Odhav, Ahmedabad.

• Its two other factory premises are on rental basis.

• The Company has applied for the Factory licenses for its Waghodia factory in the month of October, 2023.

• Its subsidiary Company has filed various RoC forms and returns irregularly.

• The company is having limited number of suppliers, for the stub period i.e. April, 2023 to February, 2024, 98.81% and in the FY 2020-21, 2021-22 and 2022-23, 48.58%, 77.13% and 89.19% respectively purchases were confined to only Top 10 suppliers.

• The company is having limited number of Customers, for the stub period i.e. April, 2023 to February, 2024, 75.79% and in the FY 2020-21, 2021-22 and 2022-23, 41.21%, 47.91% and 81.92% respectively sales were confined to only Top 10 buyers.

• There is one outstanding litigation against the Company which if determined against it, could adversely impact financial conditions.

• There have been instances of delay in filing of Goods and Service Tax (GST) returns and return of Tax Deducted at Source (TDS) dues.

• The Company has applied for Permission/NOC from Gujarat Pollution Control Board.

• The Company does not have intellectual property rights over its corporate logo.

• The company has utilized the share application money in all the case of Right Issue before the Allotment of Shares.

• Its business requires the company to obtain and renew certain registrations, licenses and permits from government and regulatory authorities and the failure to obtain and renew them in a timely manner may adversely affect its business operations.

• The company is dependent on third party transportation service providers for delivery of raw material to it from its suppliers and delivery of our products to the company`s customers.

• The company has issued Equity Shares during the last one year at a price lower than the Issue Price. The company has issued Equity Shares to promoter and public during the last 12 months preceding the date of this Prospectus at a price lower than the Issue Price as detailed in the following table.

• The company has to update the name of the company in some of the statutory approvals and certificates due to the Change in the name upon conversion of the Company in to Public Limited Company.

• Its operations are limited to the state of Gujarat.

• The company has been recently converted into public limited company and any non-compliance with the provisions of Companies Act, 2013 may attract penalties against the Company which could impact its financial and operational performance and reputation.

• Its insurance coverage may not be adequate to protect the company against certain operating risks and this may have an adverse effect on the results of its business.

• Volatility in raw material prices can affect profitability of the company adversely.

• The costs of the raw materials that the company use in its manufacturing process are subject to volatility due to factors beyond its control. Increases or fluctuations in raw material prices may have a material adverse effect on its business, financial condition, results of operations and cash flows.

• Any disruption, breakdown or shutdown of its manufacturing facilities or the company original equipment manufacturer suppliers may have a material adverse effect on its business, financial condition, results of operations and cash flows.

• Any disruption, breakdown or shutdown of its manufacturing facilities due to shifting of the company three manufacturing unit at single place or its original equipment manufacturer suppliers may have a material adverse effect on its business, financial condition, results of operations and cash flows.

• The Company is subject to high working capital requirements and its inability to fund these requirements in a timely manner may adversely impact its financial performance.

• The company could be exposed to risks arising from misconduct, fraud and trading errors by its employees and logistics agencies.

• The Company is irregular in filling the RoC Forms as well as delayed in compliance of the Allotment rules as per Companies Act, 2013.

• The occurrence of natural or man-made disasters could adversely affect its results of operations and financial condition.

• Any failure in its quality control and procurement process may adversely affect its business, results of operations and financial condition.

• The Company has not entered into any written agreements or contracts with its customers for sale of the company`s products.

• Its future success depends significantly on the continued service of its promoters, management team and other key personnel.

• The company may be unable to attract and retain sufficient qualified and trained personnel at its processing and packaging units which may adversely affect its business.

• The company may not be able to sustain effective implementation of its business and growth strategies.

• If the company is unable to accurately estimate the demand for its products, the company`s business, financial condition and results of operation may be adversely affected.

• The company is subject to strict quality requirements and any product defect issues or failure by it or its raw material suppliers to comply with quality standards may lead to the cancellation of existing and future orders, recalls or exposure to potential product liability claims.

• The company operates in a competitive business environment. Competition from existing players and new entrants and consequent pricing pressures may adversely affect its business, financial condition and results of operations.

• The company is a labor-intensive industry and are subject to stringent labor laws & regulations and any strike, work stoppage or increased wage demand by its employees or any other kind of disputes with the company employees could adversely affect its business, financial condition, results of operations and cash flows.

• Continuous availability of power and fuel is the essence for the smooth functioning of its manufacturing and business activities.

• The company regularly work with hazardous materials and activities in its operation which can be dangerous and could cause injuries to people or property.

• The average cost of acquisition of Equity Shares held by its Promoters is lower than the Issue Price.

• Its Promoters, Directors and Key Managerial Personnel may have interest in the Company, other than reimbursement of expenses incurred or remuneration.

• The company has experienced negative cash flows in previous years / periods. Any operating losses or negative cash flows in the future could adversely affect its results of operations, liquidity and financial condition.

• The company has availed credit facilities from the State Bank of India, as per sanction terms and conditions, there are certain restrictive covenants imposed on the issuer company.

• Its Promoters have provided personal guarantees and may in the future provide additional guarantees and/ or collateral securities. Its business, financial condition, results of operations, cash flows and prospects may be adversely affected by the invocation of all or any personal guarantees or enforcement of the collateral provided by its Promoters.

• The company has taken unsecured loans from promoters, directors, their relatives, Banks and some NBFCs, which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect its liquidity and business operations.

• The company has entered into certain transactions with related parties. These transactions or any future transactions with its related parties could potentially involve conflicts of interest.

• There is no monitoring agency appointed by the Company and the deployment of funds is at the discretion of its Management and the company`s Board of Directors, though it shall be monitored by its Audit Committee.

• The company has not identified any alternate source of financing the `objects of the Issue`. If the company fail to mobilize resources as per its plans, its growth plans may be affected.

• Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• Its Promoter and members of the Promoter Group will continue jointly to retain majority control over the Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

• Delay in raising funds from the IPO could adversely impact the implementation schedule.

• The company has not independently verified certain data in this Prospectus.

• Its funding requirements and proposed deployment of the Net Proceeds are based on management estimates and have not been independently appraised, and may be subject to change based on various factors, some of which are beyond its control.

• Any future issuance of Equity Shares may dilute the shareholding of the Investor or any sale of Equity Shares by its Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• The issue price of the Equity Shares may not be indicative of market price of its equity shares after the issue and the market price of its Equity shares may decline below the issue price.

• Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• Sale of shares by its promoters or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• Its future funds requirements, in the form of fresh issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the NSE Emerge in a timely manner or at all.

• The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Issue Price, or at all.

• There are restrictions on daily weekly monthly movement in the price of the equity shares, which may adversely affect the shareholder`s ability to sell for the price at which it can sell, equity shares at a particular point in time.

• Any future issuance of Equity Shares may dilute the shareholding of the Investor or any sale of Equity Shares by its Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.