Marushika Technology Ltd

Risks

• The company`s revenue generation is significantly dependent on Government tendered projects and its associated entities including public sector undertakings and government organisations. If there are unfavorable changes in the policies of the government, it could result in closure, termination or renegotiation of our projects order, which would impact on its business and financial performance significantly.

• The company is dependents on a limited number of clients for a significant portion of its revenue. Any adverse changes in industry dynamics, client strategies, or the loss of a major client could significantly affect the company`s business operations and financial performance.

• The Contracts in the company`s order book may be adjusted, cancelled, or suspended by its clients at their discretion, and therefore the company`s order book is not necessarily indicative of future revenues or earnings.

• Majority of its revenue is dependent on the products and services provided by the company under IT and Telecom Infrastructure (IT) Vertical, any decline in the demand for these services can affect our revenue and result of operations.

• The Company is dependent on various Original Equipment Manufacturers (OEMs) for the supply of products required for its projects, to act as a value-added distributor and is exposed to risks relating to fluctuations in their prices and shortage of Products.

• The company`s business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and the industries on which the company focus.

• The company`s contingent liabilities as stated in the company`s Restated Financial Statements could adversely affect its financial conditions.

• the company`s top 10 Suppliers contribute a significant portion of its product purchase during the financial year ended March 31, 2025 and March 31, 2024. Any dispute with one or more of them may adversely affect the company`s business operations.

• Majority of its revenues from operations are majorly derived from the state of Delhi and Uttar Pradesh. Any adverse developments affecting its operations in the state could have an adverse impact on the company`s revenue and the results of operations.

• There are outstanding legal proceedings involving the Company, Promoters, Directors, KMPs, SMPs and Group Company. Any adverse decision in such proceedings may have a material adverse effect on the company`s business, results of operations and financial condition.

• The company had negative cash flows in the past and may continue to have negative cash flows in the future.

• The properties used by the Company as its registered office and corporate office, for the purpose of its operations are not owned by the company. Any termination of the relevant lease or leave and license agreements could adversely affect its operations.

• The company`s insurance coverage in connection with its business may not be adequate and may adversely affect the company`s operations and profitability.

• The company depends on the services of external third-party service providers or sub-contractors to carry out specific components of its projects. Any failure on their part to fulfill their contractual obligation could have adverse implications for the company`s business, operational results, and cash flows.

• As an integral aspect of its business operations, it is necessary for the company to provide bank guarantees and additional guarantees. Failing to secure these guarantees or the activation of such guarantees has the potential to negatively impact its cash flows and financial standing.

• The Company may incur penalties or liabilities for non-compliances with certain provisions of the GST Act, Income Tax Act, and other applicable laws in the last 5 Years.

• The company`s business demands substantial working capital, and any shortfall in cash flow, credit, or funding availability could adversely impact its operations.

• The company generally do business with its customers on purchase order basis and do not enter into long term contracts with most of them.

• The Company has made delays in compliance with certain statutory provisions of the Companies Act, 2013. Such non- compliances / delayed filings may attract penalties and prosecution against the Company and its directors which could impact the financial position of the Company to that extent.

• Majority of the employees of the company have not been registered in the EPFO Portal and ESI Portal.

• The company`s operations are based on a Bill-to-Ship model, wherein products procured from its suppliers are billed to our Company but delivered directly to the company`s clients for project execution. Consequently,the company relies heavily on third-party transporters for the timely and safe delivery of such products. Any failure on the part of these transporters to fulfill their obligations may adversely affect its business, financial condition, and operational results.

• There are no alternate arrangements for meeting the company`s working capital requirements for the Objects of the Issue. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• The company`s projects may face various implementation and other uncertainties, such as the risks of exceeding planned time and cost, which could have negative effects on its business, financial health, operational results, and overall prospects.

• Failures to compete effectively against the company`s competitors and new entrants in the industry in which the company currently operate and the industry in which the company intend to operate may adversely affect its business, financial condition and results of operations.

• The company`s business growth may be impacted by the uncertainty and competitive nature of tender bidding processes, which are influenced by factors beyond its control.

• The company utilizes several credit facilities provided by the bank, and in accordance with the sanctioned terms, certain restrictive covenants are imposed on our company. If the company is unable to obtain approval from its lenders, it might restrict the company`s scope of activities and obstruct its growth plans.

• The average cost of acquisition of Equity Shares by its Promoters could be lower than the Issue Price.

• The company`s Inability to protect its intellectual property or any claim that the company infringe on the intellectual property rights of others could erode its competitive advantage and could have a material adverse effect on the company.

• The Company`s operation and growth is dependent upon successful implementation of its business strategies.

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

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

• The company requires certain approvals and licenses in the ordinary course of business and the failures to successfully obtain/renew such registrations would adversely affect its operations, results of operations and financial condition.

• Company`s operations and decisions are subject to lender`s strict covenants and conditions.

• The Company has entered into certain related party transactions in the past and may continue to do so in the future.

• If the company is unable to attract and retain highly skilled IT professionals, the company may not have the necessary resources to properly staff projects, and failures to successfully compete for such IT professionals could materially adversely affect the company`s business, financial condition and results of operations.

• The Company has obtained unsecured loans amounting to Rs. 404.93 Lakhs on the basis of restated standalone financial statements that may be recalled by the lenders at any time.

• The company has issued Equity Shares during the last one year at a price that may be below the Issue Price.

• The company`s Board of Directors does not have any experience of listed companies.

• The company`s success is dependent on its Promoters, senior management and other key personnel. The company`s inability to attract and retain key personnel or the loss of services of the company`s Promoters or Managing Director and Directors may effect the company`s business results of operations, financial condition and cash flows.

• The company could be harmed by employee misconduct, errors, fraud, theft, misbehaviour, negligence, or data theft, which are difficult to detect, and any such incidents could adversely affect its financial condition, results of operations, and reputation.

• If the company fails to maintain an effective system of internal controls, the company may not be able to successfully manage or accurately report its financial risk.

• The company`s present promoters of the Company are first generation entrepreneurs.

• This Draft Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, Dun & Bradstreet Information Services India Private Limited, which the company has commissioned and paid for purposes of confirming its understanding of the industry exclusively in connection with the Offer.

• The company faces competition in the company`s business from organized and unorganized players, which may adversely affect its business operation and financial condition.

• Potential conflicts of interest may arise due to the involvement of its Promoters, Directors and certain Group Companies in businesses similar to that of the Company.

• Failures to comply with client-imposed standards, including industry- and country-specific laws and regulations, could adversely affect the company`s reputation, result in liability claims, and impact future business opportunities.

• Certain Agreements, deeds or licenses and certificates may be in the previous name of the company, the company has to update the name of the company in all the statutory approvals and certificates due to the conversion of the Company.

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

• The company`s Independent Directors do not possess educational qualifications relevant to its business operations, which may affect their ability to provide effective oversight.

• Certain key performance indicators for certain listed industry peers included in this Draft Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.

• The Company`s future funding requirements, in the form of further issue of capital or other securities and/or loans that might be availed by the company, may turn out to be prejudicial to the interest of the shareholders depending upon the terms and conditions on which they are raised.

• Industry information included in this Draft Red Herring Prospectus has been derived from an industry report from various websites. The reliability on the forecasts of the reports could be incorrect and would significantly impact its operations.

• Our revenue generation is significantly dependent on Government tendered projects and its associated entities including public sector undertakings and government organisations. If there are unfavorable changes in the policies of the government, it could result in closure, termination or renegotiation of our projects order, which would impact on our business and financial performance significantly.

• We are dependent on a limited number of clients for a significant portion of our revenue. Any adverse changes in industry dynamics, client strategies, or the loss of a major client could significantly affect our business operations and financial performance.

• The Contracts in our order book may be adjusted, cancelled, or suspended by our clients at their discretion, and therefore our order book is not necessarily indicative of future revenues or earnings.

• Majority of our revenue is dependent on the products and services provided by us under IT and Telecom Infrastructure (IT) Vertical, any decline in the demand for these services can affect our revenue and result of operations.

• Majority of our revenues from operations are majorly derived from the state of Delhi and Uttar Pradesh. Any adverse developments affecting our operations in the state could have an adverse impact on our revenue and the results of operations.

• Our Company is dependent on various Original Equipment Manufacturers (OEMs) for the supply of products required for our projects, to act as a value-added distributor and is exposed to risks relating to fluctuations in their prices and shortage of Products.

• Our business will suffer if we fail to anticipate and develop new services and enhance existing services in order to keep pace with rapid changes in technology and the industries on which we focus.

• As an integral aspect of our business operations, it is necessary for us to provide bank guarantees and additional guarantees. Failing to secure these guarantees or the activation of such guarantees has the potential to negatively impact our cash flows and financial standing.

• Our business demands substantial working capital, and any shortfall in cash flow, credit, or funding availability could adversely impact our operations.

• If we are unable to attract and retain highly skilled IT professionals, we may not have the necessary resources to properly staff projects, and failure to successfully compete for such IT professionals could materially adversely affect our business, financial condition and results of operations.

• Our Top 10 Suppliers contribute a significant portion of our product purchase during the period ended September 30, 2025 and for the financial year ended March 31, 2025, March 31, 2024 and March 31, 2023. Any dispute with one or more of them may adversely affect our business operations.

• There are outstanding legal proceedings involving our Company, Promoters, Directors, KMPs, SMPs and Group Company. Any adverse decision in such proceedings may have a material adverse effect on our business, results of operations and financial condition.

• We had negative cash flows in the past and may continue to have negative cash flows in the future.

• The properties used by the Company as its registered office and corporate office, for the purpose of its operations are not owned by us. Any termination of the relevant lease or leave and license agreements could adversely affect our operations.

• Our insurance coverage in connection with our business may not be adequate and may adversely affect our operations and profitability.

• We depend on the services of external third-party service providers or sub-contractors to carry out specific components of our projects. Any failure on their part to fulfill their contractual obligation could have adverse implications for our business, operational results, and cash flows.

• Our Company may incur penalties or liabilities for non-compliances with certain provisions of the GST Act, Income Tax Act, and other applicable laws in the last 5 Years.

• We generally do business with our customers on purchase order basis and do not enter into long term contracts with most of them.

• Our Company have made delays in compliance with certain statutory provisions of the Companies Act, 2013. Such non- compliances / delayed filings may attract penalties and prosecution against the Company and its directors which could impact the financial position of the Company to that extent.

• Majority of the employees of the company have not been registered in the EPFO Portal and ESI Portal.

• Our operations are based on a Bill-to-Ship model, wherein products procured from our suppliers are billed to our Company but delivered directly to our clients for project execution. Consequently, we rely heavily on thirdparty transporters for the timely and safe delivery of such products. Any failure on the part of these transporters to fulfill their obligations may adversely affect our business, financial condition, and operational results.

• There are no alternate arrangements for meeting our working capital requirements for the Objects of the Issue. Any shortfall in raising / meeting the same could adversely affect our growth plans, operations and financial performance.

• Our projects may face various implementation and other uncertainties, such as the risks of exceeding planned time and cost, which could have negative effects on our business, financial health, operational results, and overall prospects.

• Failure to compete effectively against our competitors and new entrants in the industry in which we currently operate and the industry in which we intend to operate may adversely affect our business, financial condition and results of operations.

• Potential conflicts of interest may arise due to the involvement of our Promoters, Directors and certain Group Companies in businesses similar to that of our Company.

• Our Company has incurred indebtedness, and any inability to comply with repayment obligations or covenants under financing agreements, or an increase in interest rates under floating rate facilities, could adversely affect our business, financial condition, and results of operations.

• Our business growth may be impacted by the uncertainty and competitive nature of tender bidding processes, which are influenced by factors beyond our control.

• The average cost of acquisition of Equity Shares by our Promoters could be lower than the Issue Price.

• Our Inability to protect our intellectual property or any claim that we infringe on the intellectual property rights of others could erode our competitive advantage and could have a material adverse effect on us.

• Our Company`s operation and growth is dependent upon successful implementation of our business strategies.

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

• Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of our Company.

• Our Company has dues which are outstanding to creditors. Any failure in payment of these dues may have a material adverse effect on reputation, business and financial condition.

• Any failure to maintain quality of customer service and deal with customer complaints could materially and adversely affect business and operating results.

• We require certain approvals and licenses in the ordinary course of business and the failure to successfully obtain/renew such registrations would adversely affect our operations, results of operations and financial condition.

• Company`s operations and decisions are subject to lender`s strict covenants and conditions.

• Our Company has entered into certain related party transactions in the past and may continue to do so in the future.

• If we are unable to attract and retain highly skilled IT professionals, we may not have the necessary resources to properly staff projects, and failure to successfully compete for such IT professionals could materially adversely affect our business, financial condition and results of operations.

• If we fail to maintain an effective system of internal controls, we may not be able to successfully manage or accurately report our financial risk.

• Our present promoters of the Company are first generation entrepreneurs.

• Delays in Customer payments and receivables may adversely impact the profits and affect cash flows.

• An increase in employee benefits expenses could reduce profitability.

• Our Company Promoters and some of Directors, Key Managerial Personnel and Senior Management may have interests other than reimbursement of expenses incurred and normal remuneration or benefits.

• The past performance may not be indicative of future growth. An inability to effectively manage growth and expansion may have a material adverse effect on business prospects and future financial performance

• Our Company has obtained unsecured loans amounting to Rs. 302.77 Lakhs on the basis of restated consolidated financial statements that may be recalled by the lenders at any time.

• Our company`s Board of Directors does not have any experience of listed companies.

• We could be harmed by employee misconduct, errors, fraud, theft, misbehaviour, negligence, or data theft, which are difficult to detect, and any such incidents could adversely affect our financial condition, results of operations, and reputation.

• Our success is dependent on our Promoters, senior management and other key personnel. Our inability to attract and retain key personnel or the loss of services of our Promoters or Managing Director and Directors may effect our business results of operations, financial condition and cash flows.

• Our Independent Directors do not possess professional experience relevant to IT and Telecom infrastructure, which may affect their ability to provide effective oversight.

• Our Company is Exposed to Risks Arising from Fluctuations in Foreign Currency Exchange Rates which May Adversely Affect the Company`s Financial Performance and Cash Flows.

• This Red Herring Prospectus contains information from third parties, including an industry report prepared by an independent third-party research agency, Dun & Bradstreet Information Services India Private Limited, which we have commissioned and paid for purposes of confirming our understanding of the industry exclusively in connection with the Offer.

• We face competition in our business from organized and unorganized players, which may adversely affect our business operation and financial condition.

• Failure to comply with client-imposed standards, including industry- and country-specific laws and regulations, could adversely affect our reputation, result in liability claims, and impact future business opportunities.

• Certain Agreements, deeds or licenses and certificates may be in the previous name of the company, we have to update the name of our company in all the statutory approvals and certificates due to the conversion of our Company.

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

• Certain key performance indicators for certain listed industry peers included in this Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is complete.

• Our Company`s future funding requirements, in the form of further issue of capital or other securities and/or loans that might be availed by us, may turn out to be prejudicial to the interest of the shareholders depending upon the terms and conditions on which they are raised.

• Industry information included in this Red Herring Prospectus has been derived from an industry report from various websites. The reliability on the forecasts of the reports could be incorrect and would significantly impact our operations.

• Our ability to pay dividends in the future will depend on our earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of our financing arrangements.