PNGS Reva Diamond Jewellery Limited

Risks

• The success of its business is closely tied to the strength and reputation of the company`s flagship brand, "Reva". However, there is no guarantee that the company will be able to effectively maintain or enhance the awareness and perception of the "Reva" brand in the market. Any reputational damage to the brand, name or logo could have an adverse effect on its financial condition, cash flows and results of operations.

• The company is dependents on the brand reputation of its Corporate Promoter, P.N. Gadgil & Sons Limited and any reputational damage to their brand will also have an impact on the company`s footfall and subsequently its sales and revenue.

• The company`s inability to effectively market its products could affect consumer footfall and consequently adversely impact the company`s business, financial condition, cash flows and results of operations.

• Products such as lab-grown or synthetic diamonds are gaining popularity and become more easily available, which may cause a decrease in demand for natural diamonds or gemstones from customers. The lower cost and growing acceptance of these diamonds is a potential threat to the natural diamond industry, and its pricing strategies may not be successful in competing with cost-efficient synthetic alternative products.

• The company`s ability to sustain revenue growth and profitability is dependent on converting existing customers into repeat customers and acquiring new customers in a cost-effective manner. If the company fails to achieve this, the company`s business, financial condition, results of operations, and cash flows could be adversely affected.

• The company`s ability to introduce new designs and update its collections in line with evolving customer preferences is critical to the company`s business success. If the company fails to anticipate or respond effectively to changing trends, the company`s business prospects, results of operations, and cash flows could be adversely affected.

• The company`s inability to maintain an optimal level of inventory in its Stores may impact the company`s operations adversely.

• The company`s revenue is influenced by seasonal trends and any dip in earnings during peak periods could disproportionately affect its overall performance.

• A significant portion of its revenue comes from its Stores in Maharashtra, where the company`s operations are heavily focused. If this region or these key locations face any negative developments, it could harm its business performance, growth potential, financial health, and overall profitability.

• The company`s business depends on adequate working capital to support its continues growth. If the company is unable to maintain the working capital requirements, on favorable terms, it may harm its operations, financial stability, and profitability

• The company`s business model is centered on physical retail stores. Given the competitive and fragmented nature of its markets, where success depends on keeping pace with trends, pricing strategies, and shifting consumer demands, there is no guarantee that the company will maintain our competitive edge. If the company fails to adapt effectively, it could significantly harm its financial performance, operational results, and future growth prospects.

• Failures or disruption of its information technology systems or enterprise resource planning systems may adversely affect the company`s business, results of operations and financial condition.

• The non-availability or high cost of quality gold and diamonds may adversely affect its business, results of operations, financial condition, and prospects.

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

• Absence of standardized pricing for precious and semi-precious stones may adversely impact its cost structure and profit margins

• The company`s business is highly susceptible to the availability and price stability of essential raw materials used by its manufacturing partners. Any disruptions in supply or significant fluctuations in the costs of these materials could negatively affect its operations, financial performance, cash flows, and overall financial health.

• The Objects of the Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

• Successful operations of its New Stores are dependent on a number of factors. The company`s inability to successfully establish and operate its New Stores may adversely affect the company`s business, financial condition and results of operation

• All of its revenue is derived from direct sales through our physical Stores, and any adverse developments impacting these operations could negatively affect the company`s revenue and results of operations.

• A significant portion of our revenue comes from our Stores in Maharashtra, where our operations are heavily focused. In six-months period ended September 30, 2025 and Fiscal 2025, 2024, 2023, we have derived Rs.1,528.70 million, Rs.2,503.83 million, Rs.1,892.61 million and Rs.1,923.42 million contributing to 97.54%, 96.97%, 96.75% and 96.73% of our revenue from operations from our Stores in Maharashtra. If this region or these key locations face any negative developments, it could harm our business performance, growth potential, financial health, and overall profitability.

• The company is dependent on third party manufacturers and Karigars for the production and manufacturing of all of its products. Any disruptions at such third-party production or manufacturing facilities, or failures of such third parties to adhere to the relevant quality standards may have a negative effect on its reputation, business and financial condition

• The company relies entirely on third party product manufacturers for the production of its jewellery, none of whom work exclusively for the company, leaving the company vulnerable to disruptions in their operations.

• The company`s business operates through a franchise agreement pursuant to which the company has acquired inventory and logistical support from its Corporate Promoter, P.N. Gadgil & Sons Limited. The use of these is governed by a franchise agreement dated February 1, 2025, which grants the Company an exclusive right over inventory and the use of logistical support and physical store infrastructure. This dependency creates potential operational risks and its growth and brand management remain subject to ongoing coordination with the company`s Corporate Promoter.

• The company engages in various transactions with related parties. Such dealings with related parties, may give rise to conflicts of interest. There is no guarantee that the terms negotiated in these transactions are as favourable as those the company may have secured with independent, third-party entities.

• The company`s Promoters, the company`s Directors, Key Managerial Personnel and members of Senior Management have interests in its business other than the reimbursement of expenses incurred or normal remuneration or benefits. Further, conflicts of interest may arise out of business ventures in which certain of the company`s Directors are interested.

• Delay/ default in payment of statutory dues may attract penalties and in turn have an adverse impact on its financial condition.

• The company`s Stores operated in premises which are leased by its Corporate Promoter, P.N. Gadgil & Sons Limited and any issues related to lease renewals, unfavourable lease terms, or property title disputes could negatively impact the company`s business operations and financial performance.

• The company`s insurance policies may not adequately cover the company against certain risks and hazards, which may have an 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.

• dependent on its key management personnel and senior management personnel. The company`s failures to attract, motivate, retain and train sufficient designers and sales personnel may adversely affect its business, results of operations, financial condition and prospects. The company`s business and prospects may be adversely affected.

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

• The company has a trademark application pending for its name and corporate logo. If the company is unable to protect its intellectual property rights, the company`s business, results of operations and financial condition may be adversely affected. The company mights infringe upon the intellectual property rights of others and any misappropriation of its intellectual property could harm the company`s competitive position

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

• The company`s ability to access capital depends on its credit ratings. Non availability of credit ratings or a poor rating may restrict the company`s access to capital and thereby adversely affect its business and results of operations.

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

• If the company fails to retain existing customers, the company may not be able to sustain its revenue base and margins, which would have a material adverse effect on the company`s business and results of operations

• The company purchases inventory in anticipation of sales. The company`s ability to manage inventory effectively and accurately forecast demand is crucial to maintaining operational efficiency and financial stability. Any failures in these areas could significantly harm its business and results of operations.

• The company`s business is highly susceptible to the availability and price stability of essential raw materials used by its manufacturing partners. Any disruptions in supply or significant fluctuations in the costs of these materials could negatively affect its operations, financial performance, cash flows, and overall financial health.

• The company`s business operates in a competitive environment, and its inability to effectively compete could negatively impact the company`s operations, financial performance, cash flows, and overall financial health. The Indian jewellery market is characterized by intense rivalry among both domestic and international players, with competition spanning pricing, product diversity, quality, and marketing strategies.

• There are outstanding litigation proceedings against its Promoter and Directors. Any adverse outcome in such proceedings may have an adverse impact on the company`s reputation, business, financial condition, results of operations and cash flows

• Some of its Directors on its Board have no experience of being directors in any other listed entity within India, therefore, they will be able to provide limited guidance in relation to affairs of the Company post listing.

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

• In this Draft 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.

• Extracts of industry information included in this Draft Red Herring Prospectus has been derived from an industry report prepared by CARE Analytics and Advisory Private Limited exclusively commissioned and paid for by the company exclusively in connection with the Issue. Any reliance on such information for making an investment decision in the Issue is subject to inherent risks.

• After the completion of the Issue, the company`s Promoters along with the members of its Promoter Group will continue to collectively hold majority of the shareholding in the Company, which will allow them to influence the outcome of matters requiring shareholder approval.