Kizi Apparels

Risks

• Factual inaccuracy and irregularly in filling RoC Form PAS-3 for the allotment dated June 03, 2023.

• Its registered office and Factory premises are on lease basis.

• The company has very short operating history as company.

• There are outstanding litigations by and against the Company which if determined against it, could adversely impact financial conditions.

• The Company has acquired the ongoing business of M/s. Aaika Creations, a Proprietorship Concern through Business Transfer agreement.

• If the company may unable to maintain and enhance its brand, the sales of its products may suffer which would have a material adverse effect on its business operations.

• 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.

• If the Company is unable to continue being creative in its designs or if the company is unable to keep up to the changing fashion trends, its sales could be affected.

• The company is dependent on third party transportation service providers for delivery of raw materials from suppliers to it and delivery of readymade garments to its customers and business associates. Any failure on part of such transport service providers to meet their obligations could have a material adverse effect on its business, financial condition and results of operation.

• The company is subject to risks associated with rejection of its products consequential to defects, which could generate adverse publicity or adversely affect its business, results of operations or financial condition.

• Its top ten customers contribute majority of the company revenues from operations. Any loss of business from one or more of them may adversely affect its revenues and profitability.

• Its top ten suppliers contribute majority of the company purchases. Any loss of business with one or more of them may adversely affect its business operations and profitability.

• Its business requires it 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 has unsecured loans, which are repayable on demand. Any demand from lenders for repayment of such unsecured loans, may adversely affect its business operations and financial condition of the Company.

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

• The Company depends on timely identification of evolving fashion trends and creating new designs. Any delay on the part of the Company in this regard may adversely affect its business operations.

• Its revenues and profits are dependent on several factors. Any adverse change in these factors or in combination of these factors may affect its business operations and the financial condition and consequently, its ability to pay dividends.

• 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 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.

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

• Its may not be able to sustain effective implementation of the company`s business and growth strategies.

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

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

• The company has not executed any agreement with any of its labours who are on Job work basis.

• Its business is manpower intensive and any unavailability of its employees or shortage of labour or any strikes, work stoppages, increased wage demands by workmen or changes in regulations governing hiring of labour may have an adverse impact on its cash flows and results of operations.

• The Logo which is being used by it is yet not registered with the Trade Marks.

• Its inability to procure and/or maintain adequate insurance cover in connection with its business may adversely affect the company operations and profitability.

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

• The company loan agreements have several restrictive covenants and certain unconditional rights in favour of the lender, which could influence its ability to expand, in turn affecting its business and results of 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 are at the discretion of its Management and the company 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 fails to mobilize resources as per its plans, the company 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 the company Equity shares may decline below the issue price.

• Sale of Equity Shares by its Promoter 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 BSE SME 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.