Doms Industries Ltd IPO

Expansion of manufacturing capacities.

Supplement its product portfolio in order to expand its addressable market size and capture higher consumer wallet share.

Strengthen its distribution network and expand its modern trade channels.

Undertake inorganic growth through acquisitions or strategic partnerships.

Strengthening the `DOMS` brands and enhance synergies.

Strengthen its technology and data capabilities to drive business efficiencies.

Leadership position in the Indian `stationery and art material` industry with the widest range of products, driving rapid business growth.

Strong brand recall driven by high quality, innovative and differentiated products.

World class manufacturing infrastructure, with a focus on backward integration to drive efficiencies.

Robust multi-channel distribution network with strong pan India and international presence.

Strategic partnership with FILA enabling access to global markets and product know-how.

Experienced Promoters and management team.

Product concentration risk - its derived a significant portion (approximately 60%) of the company Gross Product Sales in each of the last three Fiscals from the sale of its key products and a significant portion (more than 30%) of its Gross Product Sales in Fiscal 2023 is attributable to the sale of ooden pencils`. Any decline in the Gross Product Sales of its key products in general or specifically `Wooden pencils` could have an adverse effect on its business, results of operations and financial condition.

Distribution risk - the company is dependent on its "General Trade" distribution network for a significant portion (more than 70.00%) of its Gross Product Sales in each of the last three Fiscals. Failure to manage its "General Trade" distribution network efficiently could have an adverse impact on its business, results of operations and financial condition.

Brand and counterfeiting risk - Any deterioration of its brand image, reputation and its consumer`s awareness of the company`s brand and products could have a material adverse effect on its business, results of operations and financial condition. Further, the availability of look-alikes, counterfeit products, primarily in its domestic market, manufactured by other companies and passed off as its products, could also adversely affect its goodwill and results of operations.

Dependence on natural resources for raw materials - Some of the raw materials used in its production processes are natural resources and therefore the company is subject to the risk of depletion of such natural resources.

Supply risk - The company has not entered into any formal contracts or exclusive arrangement with its suppliers from whom its procure materials consumed by it for the company`s manufacturing process. Further, its dependent on certain limited suppliers for some of its raw materials. In the event, the company is unable to procure such materials at terms favourable to it, or at all, its business, financial condition and results of operations may be adversely affected.

Pricing pressure from suppliers - Increase in costs of raw materials or its inability to fully pass on costs to its customers, may impact the company revenue from operations and profitability and may result in a materially adverse effect on its business, results of operations and financial condition.

Inability to assess consumer preference and demand - its success depends on its ability to promptly identify and respond to changing consumer preferences or evolving trends and successfully launch new products or SKUs in the market. Failure to do so may decrease the demand for its products among its consumers, which may adversely affect its business, results of operations and financial condition.

Inventory risk - Failure to correctly assess the demand for its products and maintain optimal inventory levels could increase its inventory holding costs and adversely affect the company`s business, results of operations and financial condition.

Dependence on FILA for export sale - The company is dependent on the FILA Group for its export sales (export sales to FILA Group contributing to more than 60% of its total export sales in each of the last three Fiscals). Any damage to the reputation of the FILA Group may adversely affect its business, results of operations and financial condition.

Loss - The Company has incurred loss in the past.

Negative cash flows - The company has had negative cash flows in previous financial years and may continue to have negative cash flows in the future, which could adversely affect its liquidity and operations.

Unsecured borrowings repayable on demand - The company has availed unsecured borrowings from certain lenders including its Promoters, members of the Promoter Group and directors of its Subsidiary which can be recalled by the lenders.

Risk relating to acquisitions - As part of its business strategy, the company has undertaken certain acquisitions in the past and may continue to do so in the future. Any inability to manage its expansions effectively and execute its growth strategy in a timely manner could have a material adverse effect on its business, results of operations and financial condition.

Insurance coverage - Its insurance coverage may not be adequate to protect it against all material risks.

Contingent liabilities - Its contingent liabilities as stated in the company Restated Consolidated Financial Information could adversely affect its financial condition.

Related party transactions - The company has entered, and will continue to enter, into related party transactions which may involve conflicts of interest.

Manufacturing facility - Any disruption, breakdown or shutdown of its Manufacturing Facilities may have a material adverse effect on its business, results of operations and financial condition.

Intellectual property rights - Any failure to protect its intellectual property rights could adversely affect its competitive position, business, results of operations and financial condition.

Property - its Registered Office, its Corporate Office and certain land parcels on which the company Manufacturing Facilities are established are on long term leased premises. Also, some of its other facilities are located on premises leased from third parties. A failure to renew its existing lease arrangements at commercially favourable terms or at all may have a material adverse effect on its business, financial condition and results of operations.

Dependence on third party transportation providers - the company relies on third-party transportation providers for both procurement of its raw materials and distribution of the company products. Any failure by any of its transportation providers to deliver its raw materials or its products on time, or in good condition, or at all, may adversely affect its business, financial condition and results of operations.

Risks associated with the Proposed Project - the company intend to utilise a portion of the Net Proceeds for funding its capital expenditure requirements. This includes part financing the cost of establishing the Proposed Project which may be subject to the risk of unanticipated delays in implementation, cost overruns and other risks and uncertainties. Further, the objects of the Offer includes orders for plant and machinery which have not yet been placed.

Legal proceedings - There are certain outstanding legal proceedings involving the Company, Subsidiaries, Directors and Promoters. Any adverse decisions in these proceedings could impact its reputation, business and financial condition.

Regulatory approvals and licenses - the company is subject to various laws and extensive government regulations and if its fail to obtain, maintain or renew the company statutory and regulatory licenses, permits and approvals required in the ordinary course of its business, including environmental, health and safety laws and other regulations, its business financial condition, results of operations and cash flows may be adversely affected.

Dependence on Promoter and others - The company depend on its Promoters, Key Managerial Personnel, and Senior Management Personnel for conducting its business and undertaking its day to day operations. The loss of or the company`s inability to retain, such persons could materially adversely affect its business performance.

Guarantees provided by its Promoters - its Promoters have provided personal guarantees for certain borrowings obtained by it and the company Subsidiaries, and any failure or default by it or its Subsidiaries to repay such loans could trigger repayment obligations on its Promoters, which may impact its Promoters` ability to effectively service their obligations as its Promoters and thereby, adversely impact its business and operations.

Other interests of Promoters, Directors and KMPs or SMPs - its Promoters and certain of its Directors, Key Managerial Personnel and Senior Management Personnel have interests in the Company other than their normal remuneration or benefits and reimbursement of expenses.

Control of Promoters - the company will be controlled by its Promoters along with members of its Promoter Group so long as they hold a majority of the Equity Shares, which will allow them to influence the outcome of certain matters submitted for approval of its Shareholders and their interests may not be aligned with the interest of other Shareholders.

Competition - the company face significant competitive pressures in its business. The company`s inability to compete effectively would have a material adverse effect on its business, prospects, operations or financial results.

Labour - its operations are human capital intensive and may be materially adversely affected by strikes, work stoppages or increased wage demands by its employees or those of the company suppliers.

Indebtedness - its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect its business, results of operations and financial condition.

Expansion Strategies - If the company cannot execute its strategies to expand existing customer accounts and geographical footprint effectively, its business and prospects may be materially and adversely affected.

Capacity utilisation - Information relating to historical installed capacity and estimated capacity utilization of its Manufacturing Facilities included in this Draft Red Herring Prospectus is based on various assumptions and estimates and its future production and capacity utilization may vary. Under-utilization of its manufacturing capacity and an inability to effectively utilize its Manufacturing Facilities may have an adverse effect on its business and future financial performance.

Technological advancement - Its inability to compete with technological advancements in the stationery sector may render the company`s products obsolete thereby impacting its business, operations, growth prospects or financial results.

Counterparty credit risk - The company is exposed to counterparty credit risk, and its may be subject to delays in or non-receipt of payments.

Object not appraised by banks or financial institutions - The objects of the Fresh Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of its Net Proceeds as disclosed in this Draft Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

Incidents of theft or fraud - its may be subject to fraud, theft or such similar incidents which may have an adverse effect on its business operations and financial conditions.

COVID-19 - its business and operations were adversely impacted by the COVID-19 pandemic and the future impact on its business, operations and financial performance from a recurrence or a similar outbreak cannot be predicted.

Internal controls - If its fail to maintain an effective system of internal controls, its may not be able to successfully manage, or accurately report, its financial risks.

Information technology - Technology failures could disrupt its operations and adversely affect the company`s business operations and financial performance.

Industry Data - Industry information included in this Draft Red Herring Prospectus has been derived from a third party industry report, exclusively commissioned and paid for by it.

Common pursuits - its Corporate Promoter, the company`s Subsidiaries and certain of its Group Companies have common pursuits with the Company as they are engaged in similar business or industry segments and may compete with it. Its Promoters and Directors are involved with one or more ventures which are in the same line of activity or business as that of the Company.

Offer for Sale - the company will not receive any proceeds from the Offer for Sale portion.

Non-GAAP measures - Certain non-GAAP financial measures and performance indicators used in this Draft Red Herring Prospectus to review and analyse its financial and operating performance may have limitations as analytical tools, may vary from any standard methodology applicable across the manufacturing industry in which its operate, and may not be comparable with financial or statistical information of similar nomenclature computed and presented by other companies.