Laxmi India Fin.

Risks

• The company requires substantial capital for its business and any disruption in the company sources of funding or its inability to secure funding on favourable terms could adversely affect the company liquidity, business, cash flows, results of operations and financial condition.

• Its business is primarily focused on micro, small and medium enterprises (MSMEs) and any adverse development in this sector or in government policies affecting this sector could affect the company business, cash flows and results of operations.

• Its business is primarily focused on micro, small and medium enterprises (MSMEs) and any adverse development in this sector or in government policies affecting this sector could affect our business, cash flows and results of operations.

• As the NCDs of the Company are listed on BSE, the company is subject to certain obligations and reporting requirements under SEBI Listing Regulations. Any non-compliances/delay in complying with such obligations and reporting requirements may render it liable to prosecution and/or penalties.

• The company is subject to periodic inspection by the Reserve Bank of India. Non-compliance with the observations of the Reserve Bank of India could adversely affect its business, financial condition, results of operations and cash flows.

• If the company is unable to control the level of Gross Non-Performing Asset in its portfolio effectively or if the company is unable to maintain adequate provisioning coverage or if there is any change in regulatorily-mandated provisioning requirements, its financial condition and results of operations could be adversely affected.

• The company has incurred negative cash flows in the past and may continue to have negative cash flows in the future as the company invest in further expanding its distribution network across India.

• Its Promoter Group Members may be engaged in a line of business similar to its. Any conflict of interest which may occur as a result could adversely affect the company business, prospects, results of operations and financial condition.

• Its inability to detect money-laundering and other illegal activities fully and on a timely basis may expose it to additional liability and adversely affect the company business and reputation.

• The Company has allotted Equity Shares to its Promoters during the last 3 Fiscals which may be lower than the Offer Price.

• A majority of its business operations involve transactions with mid to low-income customers in rural and semi-urban areas of India who are susceptible to adverse economic conditions. Any default from such customers could adversely affect the company business, cash flows, financial condition and results of operations.

• Majority of its Assets Under Management (AUM) are concentrated in the north-western region of India and any adverse developments in this region could have an adverse effect on the company business, cash flows and results of operations.

• While the company strive to be compliant with all applicable laws, the company has inadvertently violated certain provisions of the Companies Act and its may be subject to regulatory action from the regulatory authorities in this respect.

• In the event the Offer does not open on or before September 30, 2025 (or any other revised cut-off), its Promoters, Aneesha Baid and Deepak Hitech Motors Private Limited, may be contractually obligated to facilitate third-party transfers of Equity Shares held by certain Shareholders.

• Its Statutory Auditor has included certain qualifications, emphasis of matter and other matters in the company Restated Financial Statements.

• The company operates in a highly regulated industry and changes in the laws, rules and regulations applicable to us may adversely affect its business, financial condition and results of operations.

• The company requires certain statutory and regulatory licenses and approvals are required for conducting its business. The company inability to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate the company business may adversely impact its business, results of operation and cash flows.

• Its business is particularly vulnerable to interest rate risk, and volatility in interest rates for both lending and treasury operations, could have an adverse effect on the company net interest income and net interest margin, thereby affecting its results of operations and cash flows.

• The company receive a significant portion of its aggregate recoveries in cash which exposes it to the risk of fraud and misappropriation of funds which may consequently affect the company business.

• Its Statutory Auditors have included certain remarks in connection with the Companies (Auditor`s Report) Order ("CARO") in their audit reports in the audited financial statements for Fiscals 2025, 2024 and 2023.

• Its inability to assess and recover the full value of collateral or amounts outstanding under defaulted loans in a timely manner or at all could adversely affect its business, financial condition, cash flows and results of operations.

• Its may faces asset-liability mismatches, which could affect the company liquidity and consequently may adversely affect its operations and profitability.

• Some of its Promoters and Directors have extended personal guarantees in connection with some of the loan facilities obtained by the Company and its Corporate Promoter. Any failures or default by the Company or the Corporate Promoter to repay such loans could trigger repayment obligations on them, which may impact their ability to effectively service their obligations as its Promoters and Directors and thereby, adversely impact the company business and operations.

• Its may not be able to realise the anticipated benefits from the company recent or any future inorganic growth initiatives, which could adversely affect its business, financial condition, results of operations and prospects.

• Any inability to expand its business into new regions and markets in India could adversely affect the company business, results of operations, financial condition and cash flows.

• Its regulatory mandated ratios may differ from the company peers and if its fails to comply with the regulatory requirements, it could severely impact the company business, results of operations, cash flows and financial condition.

• Its results of operations and financial condition are dependent on certain key financial metrics, and adverse variations in these metrics may negatively impact the company business and valuation.

• The company depends on the accuracy and completeness of information provided by its customers and certain third party service providers and its reliance on any erroneous or misleading information may affect the company judgement of their creditworthiness, as well as the value of and title to the collateral.

• The company relies on its credit ratings to access debt markets and financial institutions. While the company credit ratings have been upgraded in the past, any future downgrade in its credit ratings could increase the company borrowing costs, affect its ability to obtain financing, and adversely affect the company business, results of operations and financial condition.

• If the company is unable to comply with the requirements stipulated by Reserve Bank of India, it could have a material adverse effect on its business, results of operations, cash flows and financial condition.

• Its vehicle loans are primarily focused on used vehicle financing and any adverse development in this sector or in government policies affecting this industry could affect the company business, cash flows and results of operations.

• The company relies on its information technology systems for its operations and its reliability and functionality is critical to the success of the company business. If its information security measures are compromised, damaged or interrupted by cyber incidents, breaches, or other security problems, the company business, reputation and financial condition could be adversely affected.

• There can be no assurance that its growth and financial performance will continue or will sustain at a similar rate or that the company will be able to manage its rapid growth and maintain operational efficiencies.

• The company conduct majority of its operations on rented / leased premises. In case of non-renewal of rent / lease agreements or dispute in relation to use of the premises, the company business and results of operations can be adversely affected.

• The educational qualification proofs of certain Directors and Individual Promoters are not traceable. The company has relied on declarations and undertakings furnished by such individuals for details of their profile included in this Red Herring Prospectus.

• There are outstanding litigations involving the Company and Promoters. Any adverse outcome in any of these proceedings may adversely affect its reputation, results of operations and financial condition.

• 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 its Shareholders.

• The company inability to manage the growth of its operations could disrupt its business and reduce the company profitability.

• Its inability to compete effectively in an increasingly competitive industry may adversely affect the company net interest margins, income and market share.

• The company relies on its internal credit policy to make credit decisions. If the company does not make accurate credit decisions, its business and financial results may be adversely affected.

• Regulatory or legislative developments regarding privacy and data security matters could adversely affect its ability to conduct the company business.

• Some of the loans the company provide are unsecured and are subject to certain operational and credit risks which may result in increased levels of non-performing assets (NPAs), adversely affecting its business, prospects, results of operations and financial condition.

• Majority of its Directors do not have prior experience of holding a directorship in a company listed on the Stock Exchanges.

• There have been certain instances of delays/ defaults in payment of statutory dues in the past. Any further delays / defaults may attract penalties from the government authorities and in turn may have a material adverse impact on its financial position.

• The company has certain contingent liabilities as per Ind AS 37 that have not been provided for in our financial statements, which if they materialize, may adversely affect its business, results of operations, cash flows and financial condition.

• 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 Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

• Its may faces difficulties and incur additional expenses in operating in semi-urban and rural markets, where infrastructure may be limited.

• Its insurance coverage may not be sufficient or may not adequately protect the company against all material hazards, which may adversely affect its business, results of operations, cash flows and financial condition.

• Its Promoters and Promoter Group will be able to exercise significant influence and control over it after the Offer and may have interests that are different from or conflict with those of the company other shareholders.

• The company is dependent on its Key Managerial Personnel and Senior Managerial Personnel for the continued success of its business and any failures to attract, motivate, and retain its employees could adversely affect the company business, results of operation, cash flows and financial condition, or affect its ability to maintain and grow the company business.

• Its may not be able to identify, monitor and manage risks and effectively implement the company risk management policies and any failures or significant weakness of its internal processes or systems could cause operational errors or incidents of fraud, which would adversely affect the company business, profitability, reputation, cash flows and financial condition.

• The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares after the Offer.

• The company propose to utilize the Net Proceeds of the Fresh Issue to augment capital base (Tier I) of the Company to meet future capital requirements arising out of the growth in its business. The funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

• Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

• Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned and paid by it for such a purpose.

• Its may be unable to sufficiently obtain, maintain, protect, or enforce the company intellectual property and other proprietary rights.

• In this Red Herring Prospectus, the company has included certain Non-GAAP ("Generally Accepted Accounting Principles") financial measures and certain other industry measures related to its operations and financial performance. These Non-GAAP measures and industry measures may vary from any standard methodology applicable across the Indian retailing industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.