Excellent Wires

Risks

• The company propose to utilize a portion of its Net Proceeds towards acquisition of land and construction of building and acquisition of plant and machineries for its proposed manufacturing facility at Wada. Any delay or failures in successfully setting up this facility may affect its business growth, thereby affecting its future business plans, business operations and financial conditions.

• If the company is unable to implement its growth strategy successfully including in relation to selecting locations for its new manufacturing facility, the company`s results of operations and financial condition may be adversely affected.

• The company has not entered into long-term contracts with its customers and typically operates on the basis of purchase orders from its customers, any loss of customers could adversely impact the company`s revenues and profitability.

• Raw Materials costs constitute a significant percentage of the Company`s total expenses. The costs of the raw materials that the company use in its manufacturing process are subject to volatility. Increases or fluctuations in raw material prices, may have a material adverse effect on its business, financial condition, results of operations and cash flows.

• Improper storage, processing and handling of its raw materials, in process products and finished products could damage the company inventories and, as a result, have an adverse effect on its business, results of operations and cash flows.

• Its customers are B2B businesses and are subject to high working capital requirements. The company`s inability to maintain an optimal level of working capital required for its business may impact the company`s operations adversely.

• Its Promoters and Directors, Bhavya Vasant Shah, Rachit Paresh Masalia and Darshil Hasmukh Shah plays key role in its functioning and the company heavily depends on their knowledge and experience in operating its business and therefore, it is critical for the company`s business that its Promoters remain associated with it. The company`s success also depends on its key managerial personnel and its ability to attract and retain them. Any loss of the company key person could adversely affect its business, operations and financial condition.

• Substantial portion of its purchases raw materials has been dependent upon limited number of vendors.

• The implementation of the project for which proposed issue is planned is at a very preliminary stage. Any delay in implementation of the same may increase the capital cost and also affect returns from the project.

• Information relating to its production capacities and the historical capacity utilization of its production facilities included in this Draft Prospectus is based on certain assumptions and future production and capacity utilization may vary.

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

• Because the company operates in a highly competitive industry, its revenues, profits or market share could be harmed if the company is unable to compete effectively.

• Its manufacturing facility is geographically located in one area, Palghar, Maharashtra. Any loss or shutdown of operations at any of the company facilities in this area may have an adverse effect on its business and results of operations.

• Wire products manufacturing is a labour-intensive industry, hence its may face labour disruptions and other planned and unplanned work stoppages that could interfere or temporarily disrupt its operations.

• Breakdowns of its major plants or machineries or failures to repair or maintain the same may affect its business.

• The Company had negative cash flow from operating activity in recent fiscals, details of which are given below.

• The Company, Promoters / directors and promoter group entities are involved in certain legal proceedings and potential litigations. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties which may adversely affect its business, financial condition and results of operations.

• Its financing agreements contain covenants that limit the company flexibility in operating its business. Its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements could adversely affect the company`s business, results of operations and financial condition.

• The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the Offer. Further the company has not identified any alternate source of financing the `objects of the Offer`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations, and financial performance.

• The company does not own its Registered Office, factory premises and corporate office from which the company operates.

• Its results of operations are likely to vary from year to year and be unpredictable, which could cause the market price of the Equity Shares to be volatile.

• 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.

• The Company has allotted Equity Shares during the preceding one year from the date of the Draft Red Herring Prospectus which are lower than the Issue Price.

• The company has selected the Companies from the same sector in which its operate for "Peer Competitors - Comparison of Accounting Ratios" in Basis for Offer Price section, most of these listed Companies are very large compared to it and may have product portfolio larger than its.

• Any variation in the utilization of the Net Proceeds as disclosed in this Draft Prospectus shall be subject to certain compliance requirements, including prior Shareholders` approval.

• Its funding requirements and deployment of the Offer Proceeds are based on management estimates and have not been independently appraised by any bank or financial institution.

• The Company`s management will have flexibility in utilizing the Net Proceeds. There is no monitoring agency appointed by the Company and the deployment of funds is at the discretion of its Management and the company Board of Directors, though it shall be monitored by its Audit Committee.

• The Company has availed certain unsecured loans that are recallable by the lenders at any time.

• The company has not made any dividend payments in the past and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants in its financing arrangements.

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

• Its Promoter and members of Promoter Group have mortgaged their personal properties and provided personal guarantees for its borrowings to secure its loans. The company`s business, financial condition, results of operations, cash flows and prospects may be adversely affected by the revocation of all or any of the personal guarantees provided by its Promoter and members of Promoter Group in connection with the Company`s borrowings.

• Its insurance coverage may not adequately protect the company against all material hazards and the policies does not cover all risks. In the event of the occurrence of such events, its insurance coverage may not adequately protect the company against possible risk of loss.

• The company has not commissioned an industry report for the disclosures made in the chapter titled "Industry Overview" and made disclosures on the basis of the data available on the internet.

• The requirements of being a listed company may strain its resources.

• The Company`s business operations are done PAN India specifically from Western India and any downturn and/ or any economic, regulatory, social and political change in any of the Indian states in which the company operates or seek to operate may affect its market share and/ or may adversely affect the company`s business, financial condition and results of operations.

• Its Group Entities have objects similar to the Company. There are no non-compete agreements between the Company and such Group Entities. The company cannot assure that its Promoters will not favor the interests of such entity over the company interest or that the said entities will not expand which may increase its competition and may adversely affect business operations and financial condition of the Company.

• None of its Directors possess experience of being on the board of any listed company.