DEE Development

Leverage its market leading position in the industry to capitalize on the revival of capital expenditure cycle in the sectors which the company services which will drive the next phase of its growth.

Drive automation across its facilities and processes to bring in operational efficiencies.

Forging technology tie-ups with select global OEMs to derive consistent order flow and making it a preferred partner.

Increasing its focus on high margin products with additional contributions from modular skids and usage of high-grade materials which offers a better margin contribution to profitability.

Launch its pilot plant offerings in the near-future.

Focus on deleveraging and maintaining financial flexibility.

Leading player in an industry with significant barriers to entry.

Largest player in process piping solutions in India, in terms of installed capacity, providing specialized process piping solutions with strategically located state-of-the-art Manufacturing Facilities.

Long standing customer relationships with a strong order book.

Wide range of specialized product offerings and services making it a comprehensive solution provider for its diversified customers spread across geographies and sectors.

Strong focus on automation and process excellence with an experienced engineering team to drive operational efficiencies.

Experienced and dedicated Promoters and professional management team with extensive domain knowledge.

The company is measured against high quality standards and stringent performance requirements by its customers. Any failure by it to comply with these standards or performance requirements may lead to the cancellation of existing and future orders, recalls, liquidated damages, invocation of performance bank guarantees or warranty and indemnity or liability claims, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

Its business is dependent and will continue to depend on the company manufacturing facilities, and the company is subject to certain risks in its manufacturing process due to the usage of heavy machinery in its manufacturing operations. Any slowdown or shutdown in its manufacturing operations or strikes, work stoppages or increased wage demands by its employees could interfere with our operations, and could have an adverse effect on its business, cash flows, financial condition and results of operations.

Majority of the Net Proceeds will be utilized for the repayment or prepayment of indebtedness availed of by the Company.

Any downturn in the oil and gas, power (including nuclear), process industries, chemical sectors would create an adverse impact on its revenue from operations, cash flows and financial conditions.

The company derives a significant part of its revenue from some customers, and the company does not have long term contracts with a majority of these customers. If one or more of such customers choose not to source their requirements from it or to terminate its contracts or purchase orders, the company`s business, cash flows, financial condition and results of operations may be adversely affected.

If the company is unable to introduce new products or engineering processes and respond to changing customer preferences in a timely and effective manner or if its product become obsolete due to a breakthrough in the development of technology or alternate products, the demand for its products or engineering services and supplies may decline, which may have an adverse effect on its business, cash flows, results of operations and financial condition.

Any underutilization of its manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.

The objects of the Offer for which funds have been raised and proposed deployment of the Net Proceeds of the Offer have not been appraised by a bank or a financial institution. The deployment of funds is entirely at the discretion of its management and as per the details mentioned in the section titled "Objects of the Offer". Any revision in the estimates may require it to reschedule its expenditure and may have a bearing on the company expected revenues and earnings. Further, if there are any delays or cost overruns, its business, financial condition and results of operations may be adversely affected.

The company derives majority of its revenue from its engineering services and supplies and its financial condition would be materially and adversely affected if the company fails to obtain new contracts.

The company track certain operational metrics with internal systems and tools. Certain of its operational metrics are subject to inherent challenges in measurement which may adversely affect its business and reputation.

The company faces competition from both domestic as well as international companies and its inability to compete effectively may adversely affect its business, cash flows, results of operations, financial condition and cash flows.

The number of orders the company has received in the past, its current order book and its growth rate may not be indicative of the number of orders the company will receive in future. Any delays in execution of its orders expose it to revenue volatilities adversely impacting its revenue from operations, cash flows and financial conditions.

The company has in the past, and may in the future, experience negative cash flows from investing and financing activities. Any negative cash flows in the future would adversely affect its results of operations, cash flows and financial condition.

Its Subsidiaries have incurred losses in the last three Fiscals and may do so in the future, which could have a material adverse effect on its business, prospects, financial condition, cash flows and results of operations.

Its existing international operations subject the company to various business, economic, political, regulatory and legal risks, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

Its raw material cost constitutes a significant percentage of its total expenses. Any increase in the prices of raw materials or a change in its customers` preference of raw material suppliers could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

The company is subject to contractual risks under its Power Purchase Agreements ("PPAs") with the company power purchaser, the Punjab State Power Corporation Limited ("PSPCL"), which is a government body. Any failure to extend or renew its PPAs will have a material and adverse effect on its business, financial condition, cash flows and results of operations.

Activities in the power generation business can be dangerous and the company is subject to operational risks such as injury or fatalities to people or damage to property which could disrupt its biomass power generation plant operations and expose it to legal and regulatory action, which could affect its business, financial condition, cash flows and results of operations. Any reduction in dispatched output or the inability of its biomass power generation plants to generate or deliver power as a result of such disruptions may adversely affect its income.

Some of its projects are awarded to it through a competitive bidding process. Its inability to effectively bid for such projects in the future could impact its operations and financial conditions.

The company has substantial indebtedness which requires significant cash flows to service and limits its ability to operate freely. Any breach of terms under its financing arrangements or its inability to comply with repayment and other covenants in the financing agreements could adversely affect its business, financial condition, cash flows and credit rating.

Three of its seven Manufacturing Facilities are located in Palwal, Haryana, exposing it to regulatory and other geography specific risks such as labour unrests, terrorist attacks, other acts of violence and occurrence of natural and man-made disasters.

Certain forms filed by it with the RoC have discrepancies and certain corporate records and other documents, are not traceable. While the company has conducted a search with the RoC, in respect of the unavailability of such forms and other records, its cannot assure you that such forms or records will be available at all or any time in the future.

Its ability to undertake bonus issuances of Equity Shares in the future will depends on its financial condition, results of operations and cash flows.

There have been delays in filing of certain employee provident fund returns of the Company and its Subsidiaries and default/ delay in payment of certain statutory dues. Any default/ delay in payment of statutory dues and in filing of employee provident fund returns may attract regulatory actions and financial penalties from the respective government authorities and in turn may have a material adverse impact on its financial condition and cash flows. The company has had 12 instances of defaults/ delay in the payment of certain statutory dues by the Company and Indian Subsidiaries with respect to deposit of instalments in relation to employee state insurance and employee provident fund which amounted to Rs. 5.88 million in the past three Fiscals and nine months ended December 31, 2023.

The Offer Price, market capitalization to revenue from operations multiple and price to earnings ratio based on the Offer Price by the Company may not be indicative of the market price of the Company on listing or thereafter.

The audit reports of the Company and certain of its Subsidiaries contain an emphasis of matter paragraph and the annexure to Auditor`s Report under the Companies (Auditor`s Report) Order, 2020 and Companies (Auditor`s Report) Order, 2016 of the Company and few of its Subsidiaries, certain adverse remarks or qualifications.

Some of its new initiatives may not perform as anticipated or may be discontinued. There is no guarantee that the company will be successful in the new business segment that the company plan to expand into.

The company has significant employee benefit expenses, such as salaries, wages and bonus, staff welfare expenses and contribution to provident and other funds. In case the company faces an increase in employee benefit expenses that the company is unable to pass on to its customers, its may be prevented from maintaining its competitive advantage and its profitability may be impacted.

The company depends on third-party agents for referral of a certain portion of its customers. Any factor affecting its business through third-party agents may adversely impact its reputation, business, results from operations and cash flows.

Its Barmer Satellite Facility is a dedicated facility set up to cater to the piping and erection requirements of the HPCL Rajasthan Refinery, which may shut down once the project is completed. The shutdown of this manufacturing facility may adversely affect its business, financial condition and results of operations.

The company may undertake technological tie-ups with select global OEMs or investments, which may prove to be difficult to integrate and manage or may not be successful thereby negatively impacting its business, results of operations, growth prospects and financial conditions.

The company is required to comply with various government regulations, including obtaining licenses, permits, approvals and consents under certain environmental laws, which are critical for operating its facilities and biomass power generation plants. If the company fails to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate its business, results of operations and cash flows may be adversely affected.

The company has invested substantially in automation and upgraded engineering services. If any other new technological development is discovered that significantly decreases the cost of production, its may be required to replace its existing automated machines with the new ones which would have a material adverse effect on its financial condition and results of operations.

The Company and Subsidiaries have availed unsecured loans from financial institutions, directors and relatives that may be recalled at any time.

A shortage or unavailability of electricity or water could affect its manufacturing operations and biomass power generation and may have an adverse effect on its business, results of operations and financial condition.

The industry in which the company operates is capital intensive and its current and future expansion plans may requires significant amount of capital. If the company is unable to raise additional capital, its business prospects, results and financial condition could be adversely affected.

Its customers may be unable to pay their debts due to local economic conditions, which may affect payment for its products used by them on credit leading to adversely affecting its business, financial condition and results of operations.

The company may not be able to adequately protect its intellectual property or may unintentionally infringe upon the intellectual property rights of others which could substantially harm its business.

Its may not accomplish the company growth strategy, and its business may suffer if the company fail to manage its growth efficiently or effectively, which could adversely affect its reputation, results from operations, financial conditions and cash flows.

Its business is substantially dependent on the company design and engineering teams to accurately carryout the preapproval engineering studies for potential orders. Any deviation during the execution of the order as compared to its pre- approval estimates could have a material adverse effect on its cashflows, results of operations and financial condition.

The company relies on contractors, and are therefore exposed to execution risks, including the risk of the unavailability of requisite manpower when needed, and liability towards labourers under applicable Indian laws which may adversely affect its financial condition and results of operation.

The company is dependent on third party transportation and logistics service providers. Any increase in the charges of these entities or any defect, damage or destruction caused to its products during the process of delivery could adversely affect its business, financial condition and results of operations. Further, any delay in the supply of free issue material by its customers may cause delays in the execution of the company manufacturing and could adversely affect its business, financial condition and results of operations.

There are outstanding litigations pending against it, its Subsidiaries, Directors and its Promoters, which, if determined adversely, could affect the company operations. The company could suffer significant litigation expenses in defending these claims and could be subject to significant damage, compensation, or other remedies, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

Its Promoters and certain members of the Promoter Group have provided loans and personal guarantees for certain borrowings obtained by the Company and Subsidiaries, and any failures or default by the Company and Subsidiaries to repay such loans could trigger repayment obligations on its Promoters and certain members of the Promoter Group, which may impact their ability to effectively service their obligations and thereby, adversely impact its business and operations.

Certain supporting documents in connection with the biographies of certain of its KMPs and SMPs included in the section "Our Management" of this Red Herring Prospectus are unavailable.

Employee misconduct or failures of its internal processes or procedures could harm the company by impairing its ability to attract and retain customers and subject it to significant legal liability and reputational harm, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.

In the event its contingent liabilities materialize, the company financial condition may be adversely affected.

A portion of its revenues and expenses are denominated in foreign currencies. As a result, the company is exposed to foreign currency exchange risks and regulatory changes in foreign exchange management which may adversely impact its results of operations.

Some of its facilities are located on leased premises. There can be no assurance that these lease agreements shall be renewed upon termination or that the company shall be able to obtain other premises on lease on same or similar commercial terms, which could adversely affect its business, results from operations, financial conditions and cash flows.

The success of its business depends substantially on its strong management, including its Promoter, Directors, Key Managerial Personnel and Senior Management Personnel, and on its operational workforce. The company inability to retain them or to recruit highly skilled technical personnel that are necessary for its business could adversely affect its business.

Its Promoter, certain of its Directors, Key Managerial Personnel and Senior Management Personnel may have interests in it other than reimbursement of expenses incurred and normal remuneration or benefits.

Its Promoters and certain members of its Promoter Group shall continue to retain significant control in the Company after the Offer, which shall allow them to influence the outcome of matters submitted to shareholders for approval. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control.

Any downgrading of its credit rating by a domestic or international credit rating agency may increase interest rates for its future borrowings, which would increase its cost of borrowings, and adversely affect the company ability to borrow on a competitive basis. Its credit ratings downgraded to BBB+ in September, 2021, on account of lower execution owing to disruption faced due to the spread of the COVID-19 pandemic, sustained low level of order book position providing limited revenue visibility and increase in exposure towards subsidiaries which were yet to scale up their operations.

Any withdrawal, or termination of, or unavailability of tax benefits and exemptions currently availed by it or its Subsidiaries may have an adverse effect on the company`s business, results of operations, financial condition and cash flows.

The company cannot assure payment of dividends on the Equity Shares in the future. Its ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

Its insurance coverage may not be adequate to protect the company against all potential losses to which its may be subject and this may have an adverse effect on the company`s business.

Certain sections of this Red Herring Prospectus contain information from the D&B Report which the compamy commissioned and purchased and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

Information relating to the historical installed capacities of its Manufacturing Facilities included in this Red Herring Prospectus may be based on certain assumptions and estimates by the chartered engineer verifying such information and future production and capacity utilisation may vary.

Any variation in the utilisation of Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

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

Its may be exposed to the risks of significant breaches of data security, and malfunctions or disruptions of information technology systems.

Certain Non-GAAP financial measures and other statistical information relating to its operations and financial performance have been included in this Red Herring Prospectus.

The impact of the COVID-19 pandemic is uncertain and still evolving, and could adversely affect its business, financial condition and results of operations.

The company will not receive any proceeds from the Offer for Sale. The Selling Shareholder will receive the Net Proceeds from the Offer for Sale.

The company faces employee related regulatory risks and any significant disputes with its employees and/or concerned regulators may adversely affect its business prospects, cash flows, results of operations and financial condition.