Entero Healthcare Solutions Ltd IPO

The Company operates in the large and highly fragmented Indian healthcare products distribution market and expect to benefit from market consolidation.

The Company is one of India`s largest and fastest growing healthcare products distribution platforms.

The Company has a track record of inorganic expansion and integration to grow its geographic reach, revenues and scale.

The Company has a differentiated business model offering comprehensive and integrated commercial and supply chain solutions.

The Company has a proprietary technology platform with integrated business intelligence tools and solutions.

The Company has a experienced, committed and qualified founding and professional management team with deep industry expertise and backed by healthcare focused investor.

Since its inception, the company has completed a number of acquisitions of distributors in India to expand its business and increase its customer base, and may continue to complete more acquisitions in the future. However, its may be unable to realize the anticipated benefits of past or future acquisitions successfully. Further, if the company is unable to identify expansion opportunities or experience delays or other problems in implementing our strategy of inorganic growth, its business, financial condition, results of operations, cash flows and prospects may be adversely affected.

The company has experienced negative cash flows from operating, investing and financing activities in the past and may continue to do so in the future.

The company may incur losses and its reputation may be adversely affected by the return of the company products by customers, arising from the distribution of expired, unsafe, defective, ineffective or counterfeit products, and product spoilage, breakage and damage during transportation or in storage. Its may also be subject to product liability claims.

Its lenders have imposed certain restrictive conditions on it under the company financing arrangements, which may adversely affect its ability to conduct its business and impair the company future growth plans.

Its operations are subject to high working capital requirements, and have incurred substantial indebtedness. Its inability to maintain an optimal level of working capital or financing required may impact its operations and profitability adversely.

The company has experienced losses in the Financial Years 2021, 2022 and 2023, and the six months ended September 30, 2022.

The company has pledged equity shares of certain of its Subsidiaries in favor of certain lenders and if events of default arise under the financing agreements, such lenders could invoke the relevant share pledge agreements, adversely affecting its business, results of operations, cash flows and prospects.

Its private label business may not be successful.

The Price Band, Offer Price, market capitalization to total revenue, total assets and EBITDA/EV based on the Offer Price of the Company, may not be indicative of the market price of the Company on listing or thereafter.

Its funding requirements and proposed deployment of the Net Proceeds are based on management estimates and have not been independently appraised by any bank or financial institution or any other independent agency, and may be subject to change based on various factors, some of which are beyond its control.

There have been delays in filing of certain e-forms filings of the Company in compliance with the Companies Act, 2013. Consequently, its may be subject to regulatory actions and penalties for such delays which may adversely impact its business and financial condition.

The company has made certain errors in its form filings in the past, in relation to its capital structure and amendments to the company memorandum of association, with the Registrar of Companies.

The company is unable to trace the Form FC-GPR filing for one of its past allotments of Equity Shares and CCPS.

The company does not have long term agreements with its customers, which could adversely impact its business as its customers can terminate their relationships with the company without notice.

The company is subject to credit risk with respect to trade receivables.

The company face risks related to health epidemics and pandemics which could adversely affect its business.

The company may be unable to manage its growth if the company is not able to efficiently operate, maintain or expand its supply chain and distribution infrastructure. Further, its may not be able to implement its business strategies, which may adversely affect its business and prospects.

Risks associated with its information technology systems may adversely affect its business and results of operations.

Failure to maintain optimal inventory levels could increase its operating costs or lead to unfulfilled customer orders, either of which could have an adverse effect on its business, financial condition, results of operations and prospects.

Its might be adversely impacted by competition and industry consolidation.

Changes in prescription drug pricing could adversely affect its operations and financial performance.

Its profit margins may decrease if trade discounts given by the company suppliers decrease in the future, which may adversely affect its financial condition, cash flows and results of operations.

There have been delays in compliance with certain provisions of the FEMA in relation to reporting its downstream investments.

The Company will not receive any proceeds from the Offer for Sale.

Some of its Subsidiaries have availed unsecured loans in the form of loan from their directors or inter-corporate deposits. If such unsecured loans are recalled at any time, it may adversely affect its financial condition and results of operations.

The company operates in a highly fragmented industry, and as a result, its may not be able to successfully expand its market share.

The company is dependent on the continued services and performance of its key managerial personnel, senior management and other key employees, the loss of any of whom could adversely affect its business, operating results and financial condition.

A majority of Directors on its Board does not have prior experience of directorship in any of companies listed on recognized stock exchanges, therefore, they will be able to provide only a limited guidance in relation to the affairs of the Company post listing.

Any disruption to the operation of its warehouses, or to the development of new warehousing and logistics facilities, could have an adverse effect on its business, financial condition and results of operations.

There are outstanding legal proceedings involving it, the company Subsidiaries, its Directors and its Promoters.

Its might be adversely impacted by changes or disruptions in product supply, which may lead to a loss of customers.

The company might be unable to successfully recruit and retain qualified employees, which may have an adverse impact on its business operations, financial position and results of operations.

The company is subject to operational and logistical risks and its insurance coverage may not be adequate to protect it against all potential losses to which its may be subject.

Its Registered Office and Corporate Office, and all of the company warehouse premises are leased by it, and any termination, non-renewal or failure to enforce, register or adequately stamp its lease agreements in connection with these premises could adversely affect its operations.

The company has contingent liabilities and commitments, and its financial condition could be adversely affected if these contingent liabilities materialize.

The Pro Forma Financial Information included in this Red Herring Prospectus is not indicative of its future financial condition or results of operations and may also not be indicative of its actual results of operations.

If the company is unable to obtain, protect or use its intellectual property rights, its business may be adversely affected.

Disruption or other changes in capital and credit markets might impede access to credit and increase borrowing costs for it and its customers and suppliers.

Non-compliance with existing or changes to environmental, health and safety, labor laws and other applicable regulations by it or contract manufacturers for its private label products may adversely affect the company`s business, financial condition, results of operations and cash flows.

Its business may be adversely affected by adverse news or other incidents associated with the Indian healthcare industry.

The company may not be able to detect or prevent fraud or other misconduct committed by its employees or third parties or on the company platform.

Some of its Directors and Promoters have interests in entities engaged in businesses similar to its.

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.

There have been certain instances of delays in payment of certain statutory dues by it. Any further delays in payment of statutory dues may attract financial penalties from the respective government authorities and in turn may have a material adverse impact on its financial condition and cash flows.

Its Promoters, Directors, Key Management Personnel and Senior Management may have interests other than the reimbursement of expenses incurred and receipt of remuneration or benefits from the Company.

The significant differences between the Indian Accounting Standards (Ind AS) used to prepare its financial information and other accounting principles, such as the United States Generally Accepted Accounting Principles (U.S. GAAP) and the International Financial Reporting Standards (IFRS), may affect investors` assessments of the Company`s financial condition.

This Red Herring Prospectus contains information from third parties and from the CRISIL Report prepared by CRISIL, which the company has commissioned and paid for purposes of confirming its understanding of the industry exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

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

After the completion of the Offer, its Promoters will continue to collectively hold substantial shareholding in the Company.

The company has, in the last 12 months, issued Equity Shares at a price that could be lower than the Offer Price.