Nova Agritech Ltd IPO

Enhance its product portfolio by expanding its manufacturing capacities and increasing its competencies.

Continued focus on product registrations for domestic and international market expansion.

Expand to newer geographies including expanding its export business to newer and wider spectrum.

Its strategy is to deepen farmer interface by providing holistic solutions and improve its operational parameters.

Enabling "REACH" towards business tie-ups with academic, domestic and international business partners.

Focus towards Modern Technologies and solutions.

The Company intends to set up training institutions to impart training on various aspects of innovation and operations of devices.

Augment its business through distributorship of Technicals.

Enhancing value to its business through its "Use it Right" campaign.

One stop solution for soil health management, crop nutrition, bio stimulant, bio pesticides, Integrated Pest Management (IPM) and crop protection through diversified branded product portfolio.

Established distribution network across various geographies through many dealers.

Strengthening farmer outreach through Nova Kisan Seva Kendra.

Technology driven product development and marketing.

Focus on ecologically sustainable and nutritionally balanced products.

Experienced Management Team and Promoters.

Well Equipped Research & Development facility.

The strength of its brands is crucial to the company growth and success and its may not succeed in continuing to maintain and develop the company brands.

The company propose to utilise portion of the Net Proceeds of the Offer for investment in its subsidiary, Nova Agri Sciences Private Limited for setting-up formulation plant and funding Capital Expenditure by the Company towards setting up its formulation plant, which may be subject to delays, cost overruns, and other risks and uncertainties.

The company intend to utilize a portion of the Net Proceeds towards investment in its subsidiary, Nova Agri Sciences Private Limited for setting-up a new formulation plant and towards funding Capital Expenditure in Nova Agritech Limited for expansion of the existing formulation plant. The company has yet to place orders for plant and machinery for the proposed new formulation plant and expansion of its existing formulation plant. Any delay in undertaking such and not adhering to the schedule of implementation could have a material adverse effect on the company business growth and prospects, financial condition and results of operations.

The company`s business depends on the Promoters and senior management and its ability to attract and retain key personnel. Any attrition rate of the company senior management may affect its business growth.

If the company is unable to effectively manage or expand the dealer network and operations or pursue its growth strategy and maintain healthy relations with existing dealers, The company sales may be affected and its may not achieve the company expected levels of profitability which may adversely affect its business prospects, financial condition and results of operations.

The company is required to obtain and maintain various licences and permits for its business.

The company Promoter and certain of its Directors may have interest in entities, which are engaged in lines of business similar to that of the Company. Any conflict of interest which may occur between its business and the activities undertaken by such entities could adversely affect the company business and prospects.

The Company, its Subsidiaries, Promoters and Directors are involved in certain legal proceedings and potential litigation. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business and results of operations.

The agreements governing the Company`s indebtedness contain conditions and restrictions on its operations, additional financing and capital structure.

The Company has negative cash flow during certain fiscal years; details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

Any default in payment by the dealers or delay in realising the receivables may have an adverse effect on the company business and financial operation.

The company is subject to strict technical specifications, quality requirements, regular inspections and audits by various authorities and/or regulators and its failure to comply with the quality standards and technical specifications prescribed may lead to loss of business and could negatively impact the company reputation, which would have an adverse impact on its business prospects and results of operations.

Any violation under the Legal Metrology Act, 2009 and the Legal Metrology (Packaged Commodities) Rules, 2011 by it may lead to fines and penalties, or seizure and forfeiture of the company products which could adversely affect its business.

The company`s success is also dependent on its ability to attract, hire, train and retain experienced and skilled key personnel. The company inability to hire and retain the key employee force may have an adverse effect on its business.

The Company has availed unsecured loan from the Promoters and Directors, which is repayable on demand.

The company Promoters have provided personal guarantees to secure certain of the loan facilities, which if revoked or invoked may require alternative guarantees, repayment of amounts due or termination of the facilities.

The company has significant working capital requirements and may require additional capital and financing in the future. The company ability to access capital at attractive costs also depends on its credit ratings. The company operations could be curtailed if its unable to obtain required additional capital and financing when needed.

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

The company may be subject to fluctuations in prices or any unavailability of the raw materials that its use in the company products.

The compay`s business is subject to climatic conditions. Seasonal variations and unfavourable weather patterns may have an adverse effect on its business, results of operations and financial condition.

Corporate guarantees were given by the Company for the loans availed by its Subsidiary. In the event the Subsidiary defaults on any of the loans availed, the Company will be liable for the repayment obligations.

The coronavirus pandemic ("COVID-19") has had an adverse effect on the company business and operations, and the extent to which it may continue to do so in the future cannot be predicted.

The company has contingent liabilities which could materially and adversely affect its business, results of operations and financial condition.

The company operations are subject to environmental and workers` health and safety laws and regulations. Its may have to incur material costs to comply with these regulations or suffer material liabilities or damages in the event of an incidence or non-compliance of environment and other similar laws and regulations which may have a material adverse effect on its reputation, business, financial condition and results of operations.

The Objects of the Offer have not been appraised by any bank or financial institution. The company funding requirements and proposed deployment of the Net Proceeds are based on management estimates and may be subject to change based on various factors, some of which may be beyond its control. Any variation in the utilization of the Net Proceeds or in the terms of the conditions as disclosed in this Draft Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

Any unscheduled, unplanned shutdowns in the company manufacturing operations could have an adverse effect on its business, results of operations and financial condition.

Inventories and trade receivables form a substantial part of the company current assets and net worth. Failure to manage its inventory and trade receivables could have an adverse effect on the company net sales, profitability, cash flow and liquidity.

If the company is unable to protect the personal information data of the farmers that its collect, the company reputation could be significantly harmed.

The company may be unable to maintain or establish arrangements with suppliers through whom its procure raw materials and may experience other disruptions or quality control risks in the operations of such parties.

The company may be subject to fraud, theft, employee negligence or similar incidents.

There may have been certain instances of non- compliances and delay in filings with respect to certain regulatory filings for corporate actions taken by the Company in the past. Consequently, its may be subject to regulatory actions and penalties for any such past or future non- compliance or delays and its business, financial condition and reputation may be adversely affected.

If the company fail to convert existing customers into repeat customers or to acquire new customers, its business, financial condition, and results of operations would be harmed.

If any new products or brands that its launch are not as successful as the company anticipate, its business, results of operations and financial condition may be adversely affected.

The company may be subject to significant risks and hazards when operating and maintaining its manufacturing facility, including the manufacture, usage and storage of various flammable, or hazardous substances, for which our insurance coverage might not be adequate.

The company may be unable to respond to the constant changes in consumer demands and market trends in a timely manner.

The company operate in a competitive market and face competition from other agri-input companies. Any increase in competition may adversely affect its business and financial condition.

The Company supplies Agribot Drones to the farmers for better harvesting. Any change in drone regulation or the technology becoming obsolete will have a negative impact on its business and financial condition.

The company may not be able to successfully adapt and innovate its systems, including the internal controls and procedures over financial reporting and even the company Information Technology systems, as a result of increasing business complexities and demand.

The company is dependent on third party transportation and logistics providers for the transportation of raw materials and the finished products. Any disruptions in logistics and transportation or significant increase in freight charges could adversely affect its business, financial condition and results of operations.

The company insurance may be insufficient to cover all losses associated with its business operations.

The company may be subject to labour unrest and slowdowns.

Any change in Government policies towards the agriculture sector or a reduction in subsidies and incentives provided to farmers could adversely affect the company business and results of operations.

The company may not be able to protect its trademarks from infringement.

The company logo "NOVA AGRI TECH LTD." in the form of a device mark under class 5 is opposed.

Ineffective execution of marketing programs and reduced marketing expenditure could have an adverse effect on the company sales.

Resistance from farmers to crop protection chemicals and the inappropriate application of the company products from farmers may adversely affect its business, financial condition and results of operations.

Increasing use of alternative pest management and crop protection measures may reduce demand for its products and adversely affect the companyh business and results of operations.

The company could face customer complaints or negative publicity about its customer service.

Shortage or non-availability of electricity and water could affect the company manufacturing operations and have an adverse effect on its business, results of operations and financial condition.

Changes and innovation in technology may render the company current technologies obsolete or require it to incur substantial capital expenditure for the purpose of innovation.

Under-utilization of the company existing manufacturing capacity and an inability to effectively utilize its proposed formulation plant as a part of the Objects of the Offer could have an adverse effect on the company business, future prospects and future financial performance.

Certain sections of this Draft Red Herring Prospectus disclose information from an industry report commissioned by it from CARE Advisory Research and Training Limited, which is an independent third-party entity and is not related to the Company, its Promoters or Directors in manner whatsoever. Any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

The company management will have broad discretion over the use of the Net Proceeds.

The company Promoters and certain of the Directors hold Equity Shares in the Company and are therefore interested in the Company`s performance in addition to their remuneration and reimbursement of expenses.

The company has issued Equity Shares in the last 12 months at prices that may be lower than the Offer Price.

The company Promoters and members of the Promoter Group will continue to retain control over the Company after completion of the Offer, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

The company cannot assure payment of dividends on the Equity Shares in the future.

The Company will not receive any proceeds from the Offer for Sale. Selling Shareholder is selling equity shares in the Offer and will receive proceeds as part of the Offer for Sale.