P N Gadgil Jewe.

Risks

• The strength of the brands the company use are crucial to its success. Any reputational damage to the brand, name or logo could have an adverse effect on its financial condition, cash flows and results of operations.

• Its inability to effectively market the company products, or any deterioration in public perception of its brand, could affect consumer footfall and consequently adversely impact its business, financial condition, cash flows and results of operations.

• Its inability to identify market trends and customer demand accurately and maintain an optimal level of inventory in its stores may impact the company operations adversely.

• Its business is primarily concentrated in Maharashtra and the company is significantly dependent on top five of its stores located in Maharashtra for revenue generation. Any adverse development affecting such region or stores may have an adverse effect on its business, prospects, financial condition and results of operations.

• The Company requires significant amounts of working capital for continued growth. Its inability to meet the company working capital requirements, on commercially acceptable terms, may have an adverse impact on its business, financial condition and results of operations.

• While the company commenced its e-commerce operations in Fiscal 2014, its focus primarily on a brick-and-mortar model to establish our physical presence in India. Since, the company operates in highly competitive and fragmented markets, and competition in these markets is based primarily on market trends, pricing and customer preferences, there can be no assurance that its can effectively compete with the company competitors in the future, and any such failures to compete effectively may have a material adverse effect on its business, financial condition, results of operations and prospects.

• If the company is unable to effectively manage or expand its retail network and operations or open new stores operated by the Company in accordance with its business plan, or pursue the company growth strategy, its existing and new stores may not achieve its expected levels of profitability which may adversely affect the company`s business prospects, financial condition and results of operations.

• The company does not own the trademark for its key flagship "PNG" brand and the company requires the written approval of P N Gadgil Jewellers for assigning or sub-licensing the trademark to any person, except its Subsidiaries, joint ventures or associates or franchise partners.

• The company are dependent on third party artisans for the production and manufacturing of all of its products. Any disruptions at such third-party production or manufacturing facilities, or shortage or scarcity of Karigars in the jewellery industry especially in Maharashtra or failure of such third parties to adhere to the relevant quality standards may have a negative effect on its reputation, business and financial condition and results of operations.

• Its manufacturing work is done by skilled craftsmen who does not work exclusively for it which exposes the company to any risks/adverse developments affecting the skilled craftsmen.

• The company`s income and sales are subject to seasonal fluctuations and lower income in a peak season may have a disproportionate effect on its results of operations.

• The non-availability or high cost of quality gold, diamonds, silver, precious and semi-precious metals and stones may have an adverse effect on its business, results of operations, financial condition and prospects.

• Apart from one of its directors, none of the company executive or independent directors have prior experience of directorships in listed companies.

• If the company is unable to continue to develop innovative, fashionable and popular designs, demand for its jewellery may decrease, adversely affecting the company revenues and financial condition.

• Jewellery purchases are discretionary and often perceived as luxury purchases. Any factor negatively impacting discretionary spending by consumers may adversely affect its business, results of operations, financial condition and prospects.

• Volatility in the market price of gold, silver and diamonds and other raw materials has a bearing on the value of its inventory and may affect the company income, profitability and scale of operations.

• The company has entered into transactions with related parties. These or any future related party transactions may potentially involve conflict of interest and there can be no assurance that the company could not have achieved better terms, had such arrangements been entered into with unrelated parties.

• The company relies significantly on its information technology systems for the company`s business and operations and any failures, inadequacy or security breach in such systems could adversely affect its business, results of operation and reputation.

• Its Promoters will continue to retain a significant shareholding in the Company after this Offer, which will allow them to exercise significant influence over it and any substantial change in its Promoters` shareholding may have an impact on the trading price of the company Equity Shares which could have an adverse effect on its business, results of operations, financial condition and cash flows.

• The Company, Promoters, Directors, Subsidiaries and Group Companies are or may be involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, financial condition, cash flows and results of operations.

• The company may be unable to expand its e-commerce business. Further, any damage or interruption to its online distribution channels, websites and other information systems may require a significant investment to fix or replace, and the company may suffer interruptions in its operations or may be unable to successfully manage such risks, leading to a material adverse effect on its business, results of operations and financial condition.

• The company requires certain approvals, permits and licenses in the ordinary course of business, and any failures or delay to obtain or renew them or to comply with their conditions in the future may adversely affect its operations.

• The Company has received a complaint after filing of the Draft Red Herring Prospectus alleging misreporting in its financial statements and non compliance with applicable law in relation to its public deposit schemes. Such complaints by third parties may adversely affect its reputation and business.

• Its revenues have been significantly dependent on sale of gold jewellery, any factors adversely affecting the procurement of gold or its sales of gold jewellery may negatively impact the company`s business, financial condition, results of operations and prospects.

• The company could face customer complaints or negative publicity about its customer service. This could materially and adversely affect its reputation, results of operations and financial condition.

• Regional concentration may deprive it of participating in the growth of other sizeable markets which may have adverse impact on the growth prospects of the Company.

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

• The company may fails to protect its jewellery designs and are susceptible to litigation for infringement of intellectual property rights in relation to such designs. This could materially and adversely affect its reputation, results of operations and financial condition.

• Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

• The company has incurred indebtedness, and an inability to comply with repayment and other covenants in its financing agreements could adversely affect the company`s business and financial condition.

• Most of its stores are located on leased or licensed premises. Any termination or failures by it to renew the leave and license agreements in a favourable and timely manner, or at all, could adversely affect its business and results of operations. Moreover, many of the lease and license agreements entered into by it may not be duly registered or adequately stamped.

• The company`s business depends on the performance of franchisees. Any non-performance by these franchisees may adversely affect its business operations, profitability and cash flows.

• The implementation of the schemes such as the `Dajikaka Future Plan` and `Future Purchase Plan` introduces risks and challenges to its business operations and financial performance.

• If the company is unable to protect the data related to electronic mode of payments, or any other personal information that the company collect from customers, its brand reputation could be significantly harmed.

• Its ability to attract customers is dependent on the success and visibility of the company stores. The company failures to attract optimal volume of customers to its stores could materially and adversely affect the company`s business, financial condition and results of operations.

• Fraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.

• The company operations could be adversely affected by strikes or increased wage demands by its employees or any other kind of disputes with the company employees.

• If the company fails to cost-effectively turn existing customers into repeat customers or to acquire new customers, its business, financial condition, and results of operations would be harmed.

• The company Promoters, Saurabh Vidyadhar Gadgil and Radhika Saurabh Gadgil have provided personal guarantees for loan facilities obtained by it, and any failures or default by the company to repay such loans could trigger repayment obligations on its Promoter, which may impact the company`s Promoter`s ability to effectively service his obligations as its Promoter and thereby, adversely impact the company`s business and operations.

• COVID-19 and similar outbreaks could continue to have certain adverse effects on its business, operations, cash flows and financial condition.

• As of March 31, 2024, the company has contingent liabilities which have not been provided for in its financial statements and could adversely affect the company financial condition.

• Any downgrade in its credit ratings could increase the company borrowing costs, affect its ability to obtain financing, and adversely affect the company`s business, results of operations and financial condition.

• Most of its stores are located on leased or licensed premises. Any termination or failures by it to renew the leave and license agreements in a favourable and timely manner, or at all, could adversely affect its business and results of operations. Moreover, many of the lease and license agreements entered into by it may not be duly registered or adequately stamped.

• Certain of its Directors, the company Promoters, members of its Promoter Group, Key Managerial Personnel and Senior Managerial Personnel may have interests other than reimbursement of expenses incurred and normal remuneration or benefits in the Company.

• The company is dependent on its senior management team, and Key Managerial Personnel, and the loss of, or its inability to hire, retain, train, and motivate qualified personnel could adversely affect the company`s business, results of operations, and financial condition.

• Certain sections of this Red Herring Prospectus disclose information from the industry report which has been commissioned and paid for by it exclusively in connection with the Offer and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

• Any variation in the utilisation of the Net Proceeds or in the terms of any contract as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior shareholders` approval.

• The Company will not receive any proceeds from the Offer for Sale and the proceeds from the Offer for Sale will be paid to the Promoter Selling Shareholder.

• The company Promoter, Saurabh Vidyadhar Gadgil, has issued a non-compete undertaking to the Company, for avoiding any conflict of interest between the Company and / or its current Subsidiaries ("Group"), and any other entity owned and controlled by Saurabh Vidyadhar Gadgil and/ or any members of its Promoter Group ("SVG Controlled Entities"). Any termination or variation of the non-compete undertaking could result in a conflict of interest between SVG Controlled Entities and the company.

• A portion of the Net Proceeds may be utilized for repayment of loans taken from Bank of Baroda which is the holding company of one of its Book Running Lead Managers, BOBCAPS.