KK Shah Hospital

Risks

• The hospital has been formed specifically for the purpose of acquisition of the business of M/s Shah Hospital (proprietorship firm one of its Promoters) thus the company has limited operating history as a Company which may make it difficult for investors to evaluate its historical performance or future prospects.

• Its revenue is dependent on in-patient treatments, and out-patient primary care, which could decline due to a variety of factors. Any such decline will adversely affect its cash flows and financial position.

• There are outstanding litigations pending against its directors, promoters and group companies, which, if determined adversely, could affect its operations.

• The hospital is highly dependent on its doctors, nurses and other healthcare professionals, and the loss of, or inability to attract or retain, such persons could adversely affect its business and results of operations.

• If the hospital is unable to keep abreast with technological changes, new equipment and service introductions, and evolving industry standards, its business and financial condition may be adversely affected. Further, its will also incur costs associated with replacing obsolete equipment.

• Its medical professional staff consists of both employees as well as doctors on a consultancy basis. If such medical staff discontinue their association with it or are unable to provide their services at its hospitals for any reason or if its are unable to attract or retain such consultants/full time doctors, and other healthcare professionals, its business, results of operations and cash flows may be materially and adversely affected.

• Delay in receipt of payment from its patients / customers may affect its cash flows, which may, in turn affect its financial condition and results of operations.

• Its failure to compete effectively against existing and new competitors, other multispecialty and/or super specialty hospitals and/or medical practitioners, could adversely affect its market share, business, financial condition, results of operations and prospects.

• The Company has acquired sole proprietorship firm of one of its Promoters i.e., M/s Shah Hospital after its incorporation vide business transfer agreement dated December 31, 2022. Any future acquisition of other businesses could result in operating difficulties, integration issues and other adverse consequences due to its limited past experience in businesses.

• Most of its radiotherapy and diagnostic imaging equipment contain radioactive and nuclear materials or emits radiation during operation which could make it liable for damages.

• Its dependent on obtaining and maintaining certain governmental and regulatory licences and the hospital has not obtained a number of approvals, registrations and licences with respect to its operations in various facilities. Its ability to operate out of such facilities or carry on the relevant activity / procedures in question, may be impeded as a result, thus adversely impacting its operations and revenues.

• The hospital has been recently incorporated the 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.

• Its may be unable to protect its intellectual property or knowhow from third party infringement which could harm its brand and services.

• If its not successful in managing its growth, its profitability may decrease and result in adverse impact on its business, results of operations and financial condition.

• This industry is highly regulated industry requires compliances of various laws and regulations as the human life is involved.

• Its Promoters and Promoter Group will continue to retain significant control in the Company, which will allow them to influence the outcome of matters submitted to shareholders for approval.

• A majority of its doctors are not its employees. its arrangements with such doctors are on a consultancy basis. There is no assurance they will continue to provide services to it on an ongoing basis. Its revenues, profits and financial condition will be significantly impacted in the event that its consultant doctors cease providing services to it.

• Its insurance coverage may be insufficient to protect it against all present and future risks, which may adversely affect its business, financial condition, results of operations and prospects.

• Lack of health insurance in India may adversely affect its business, cash flows and results of operations.

• Its insurance premia may increase and any significant deterioration in its claims experience, may result in insurance not being available to it on acceptable terms.

• Any downtime for maintenance and repair of its medical equipment could lead to business interruptions that could be expensive and harmful to its reputation and to its business.

• The hospital is subject to various laws and regulations relating to the handling and disposal of hazardous materials and wastes and bio-medical wastes. If its fail to comply with such laws and regulations, its could become subject to prosecution, including imprisonment and fines or incur costs that could have a material adverse effect on the success of its business.

• The hospital is dependent on its current pool of Executive Director and Key Management Personnel to manage its day-to-day operations and to execute its growth strategy going forward.

• Its will incur costs associated with replacing obsolete equipment.

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of its Management and its Board of Directors, though it shall be monitored by its Audit Committee.

• If the hospital is not able to obtain, renew or maintain the statutory and regulatory permits and approvals required to operate its business it may have an adverse effect on its business.

• Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• In addition to normal remuneration or benefits and reimbursement of expenses, some of its directors and key managerial personnel are interested in the Company to the extent of their shareholding, and dividend entitlement in the Company.

• Its Registered Office and other offices are not owned by it. In the event its lose such rights, its business, financial condition and results of operations and cash flows could be adversely affected.

• Its inability to obtain, renew or maintain its statutory and regulatory permits and approvals required to operate its business may have a material adverse effect on its business, financial condition and results of operations.

• If the hospital is unable to source business opportunities effectively, its may not achieve its financial objectives.

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

• Its actual results could differ from the estimates and projections used to prepare its financial statements.

• 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.

• Its may not be successful in implementing its business strategies.

• Within the parameters as mentioned in the chapter titled "Objects of the Issue" beginning on page 75 of this Draft Prospectus, the Company`s management will have flexibility in applying the proceeds of this Issue. The fund requirement and deployment mentioned in the Objects of this Issue have not been appraised by any bank or financial institution.

• The Company is yet to place orders for purchase of medical equipments at its hospital. Any delay in placing orders or procurement of such medical equipments may delay the schedule of implementation and possibly increase the cost of commencing operations.

• Its one of the objects of the Issue is to purchase of medical equipments, for operation of such medical equipments, its requires numbers of approvals from The Office of the Chief Medical & Health Officer, AERB, and other relevant authorities and any failure or delay in obtaining such approvals in a timely manner may adversely affect its operations.

• The deployment of funds raised through this Issue shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.

• Managing employee benefit pressures in India may prevent it from sustaining its competitive advantage which could adversely affect its business prospects and future financial performance.

• In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the completion of the objects / schedule of implementation of this Issue which would in turn affect its revenues and results of operations.

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

• Its could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The requirements of being a public listed company may strain its resources and impose additional requirements.

• System failures or inadequacy and security breaches in computer systems may adversely affect its business.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and have not been appraised by any bank or financial institution or any independent agency.

• Its outsource some of its service functions to third-party contractors. Any lapse by such third-party service providers may have adverse consequences on its business and reputation.

• Its could be exposed to risks relating to the handling of personal information, including medical data.

• The hospital has not independently verified certain data in this Draft Prospectus.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the price determined at time of registering the Draft Prospectus.

• An investment in the Equity Shares is subject to general risk related to investments in Indian Companies.

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

• The Issue Price of the Equity Shares may not be indicative of the market price of the Equity Shares after the Issue.

• Its 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 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.

• Any future issuance of Equity Shares may dilute your shareholding and sale of its Equity Shares by its Promoters or other shareholders may adversely affect the trading price of the Equity Shares.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME Platform of BSE Limited in a timely manner, 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.

• Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

• The price of its Equity Shares may be volatile, or an active trading market for its Equity Shares may not develop.

• Foreign investors are subject to foreign investment restrictions under Indian law that limits its ability to attract foreign investors, which may adversely impact the market price of the Equity Shares.