Ratnaveer Precision Engineering Ltd IPO

Wide product portfolio and multiple designs product enables the company to serve diverse end-use applications.

Experienced Promoter

Synergy of young and experienced management team with a committed employee base

Establish Presence in the international markets

Strategically located manufacturing facilities with a core focus on quality;

Quality Assurance and Quality Control of its products;

Growth led by continuous investment and R&D set up for new product development.

The company do not have long-term agreements with the company suppliers for raw materials and an inability to procure the desired quality, quantity of its raw materials in a timely manner and at reasonable costs, or at all, may have a negative impact on the company business, results of operations, financial condition and cash flows.

The pricing in the steel industry is subject to market demand, volatility and economic conditions. Fluctuations in steel prices may have a material adverse impact on its business, results of operations, prospects and financial conditions.

The company is dependent on a few customers for a major part of its revenues. Further the company do not enter into long-term arrangements with its customers and any failure to continue the company existing arrangements could adversely affect its business and results of operations.

A significant portion of the company domestic sales are derived from the western and north zone and any adverse developments in this market could adversely affect its business.

The company business is working capital intensive. If its experience insufficient cash flows from the operations or are unable to borrow to meet the company working capital requirements, it may materially and adversely affect its business and results of operations.

The company business is a high volume-low margin business. Due to this nature of its business, sudden changes with respect to price movements in goods being traded or sudden ad hoc anomalies in business or operations could substantially affect the company net bottom lines and hence, adversely affect its results of operations and financial conditions.

The company has experienced negative cash flows in relation to its operating, investing and financing activities in the last three financial years. Any negative cash flows in the future would adversely affect the company results of operations and financial condition.

The company operate in a highly competitive and fragmented industry with low barriers to entry and may be unable to compete successfully against existing or new competitors, the organized and unorganized.

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 the equity shareholders.

Most of the company Directors do not have any prior experience of being a director in any other listed company in India.

Under-utilization of the company production capacities could have an adverse effect on its business, future prospects and future financial performance.

The company has not received necessary approval from the competent authority for construction of a portion of its factory premises at Unit-I admeasuring about 1,300 square meters.

The company inability to collect receivables from its customers or default in payment by them could result in the reduction of the company profits and affect its cash flows.

The company has incurred borrowings from commercial banks and financial institutions and its inability to comply with repayment and other covenants in the company financing agreements could adversely affect of the business and financial condition.

All the company production units are located in one geographic area and therefore, any localized social unrest, natural disaster or breakdown of services or any other natural disaster in and around Vadodara and Ahmedabad, Gujarat or any disruption in production at, or shutdown of, its production units could have material adverse effect on the company business and financial condition.

The company Promoter has provided personal guarantee for loans availed by it. In the event of default of the debt obligations, the personal guarantees may be invoked thereby adversely affecting its Promoter`s ability to manage the affairs of the Company and the Company`s profitability and consequently this may impact its business, prospects, financial condition and results of operations.

The company inability to effectively manage its growth or to successfully implement the company business plan and growth strategy could have an adverse effect on its business, results of operations, financial condition and cash flows.

The company backward integration processes are set-up at units which are taken on leave and license basis. If its not able to renew these leave and license agreements, the company may have to suspend or outsource the backward integration processes which may have an adverse impact on its business, results of operations, cash flows and profitability.

A major portion of the company public shareholding is held by Shareholders who are extended family members of its Promoter. After the successful completion of the Offer, these Shareholders shall have the ability to influence the outcome of matters that are submitted to public shareholders for their approval.

The Offer Price of the company Equity Shares, its market capitalization to revenue from operations, market capitalization to total income, market capitalization to tangible assets and the Enterprise Value to EBIDTA ratio may not be indicative of the market price of the Equity Shares after the Offer.

The Company, its Promoter and its Directors are party to certain legal proceedings. Any adverse outcome in such proceedings may have an adverse impact on its reputation, business, financial condition, results of operations and cash flows.

The company is required to obtain consents under certain environmental laws, which are critical for operating the units. Its have in the past been non-compliant with the requirements under environmental law for the company operations and there is no assurance that in the future its would be able to obtain such consent in a timely manner or at all.

The company Restated Financial Statements disclose certain contingent liabilities which if materialize, may adversely affect its business, financial condition, cash flows and results of operation.

The average cost of acquisition of Equity Shares by the company Promoter Selling Shareholder is lower than the Floor Price.

The company has experienced high attrition rate in respect of the Directors and Key Managerial Personnel. Its may not be able to retain such persons in future which could adversely affect the company business, results of operations, financial condition and cash flows.

The Company has not paid dividend accrued on the Preference Shares.

The company inability to accurately forecast demand or price for its products and manage the company inventory may adversely affect its business, results of operations, financial condition and cash flows.

There have been some instances of delayed filing/ incorrect filings with the Registrar of Companies and other non-compliances under the Companies Act in the past which may attract penalties.

The company is required to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate its business and if the company fail to do so in a timely manner or at all and its business, financial conditions, results of operations, and cash flows may be adversely affected.

Information relating to the installed production capacity and capacity utilization of the company production units included in this Red Herring Prospectus are based on various assumptions and estimates and future production and capacity may vary.

The company don`t have own any registered trade names or trademarks and its may therefore not be able to adequately protect the company intellectual property. Furthermore, its may be subject to claims alleging breach of third party intellectual property rights. Any litigation related to the company intellectual property could be time consuming and costly.

The company has a high debt equity ratio.

The company is dependent on third-party transportation providers for the supply of raw materials and delivery of its finished products.

The company may not be able to identify or effectively respond to evolving preferences, expectations or trends in a timely manner and a failure to derive the desired benefits from the company product development efforts may impact its competitiveness and profitability.

The company production units and office premises are located on leasehold / leave and license basis. If these leasehold /license agreements are terminated or not renewed on terms acceptable to it, it could have a material adverse effect on its business, financial condition, results of operations and cash flows.

There have been some instances of delay/ default in payment of statutory dues by the Company in the past.

The company may be subject to significant risks and hazards when operating and maintaining its units, for which the company insurance coverage might not be adequate.

Reliance has been placed on declarations furnished by one of the company senior management, for details of his profile included in this Red Herring Prospectus.

Inability to protect, strengthen and enhance the company existing reputation could adversely affect its business prospects and financial performance.

Any unscheduled or prolonged disruption of the company manufacturing operations could materially and adversely affect its business, financial condition, results of operations and cash flows.

The company ability to grow its business depends on the relationships with the customers and any adverse changes in these relationships, or the company inability to enter into new relationships and thereby expand its customer network, could negatively affect of the business and results of operations.

Stringent environmental, health and safety laws and regulations or stringent enforcement of existing environmental, health and safety laws and regulations may result in increased liabilities and increased capital expenditures.

Certain agreements may be inadequately stamped or may not have been registered or may not have necessary disclosure as a result of which the company operations may be adversely affected.

The company manufacturing activities are dependent on the delivery of adequate and uninterrupted supply of electrical power at a reasonable cost. Any shortage or any prolonged interruption or increase in the cost of power could adversely affect its business, result of operations, financial conditions and cash flows.

The company appoint contract labour for carrying out some of its operations and the company may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on its results of operations, cash flows and financial condition.

The company may be subject to unionization, work stoppages or increased labour costs, which could adversely affect the company business and results of operations.

Fluctuations in the average selling prices of stainless steel could adversely affect its business, financial condition, results of operations and cash flows.

The company is dependent on its Promoter, Directors and a number of key managerial personnel and the loss of, or the company inability to attract or retain such persons could adversely affect its business, results of operations, financial condition and cash flows.

Any downgrading of the company credit rating by a domestic or international credit rating agency may increase interest rates for its future borrowings, which would increase of the cost of borrowings, and adversely affect the company ability to borrow on a competitive basis.

An inability to renew quality accreditations in a timely manner or at all, or any deficiencies in the quality of the company products may give rise to product liability claims and negatively affect its business prospects and financial performance.

The continuing impact of the COVID-19 pandemic on the company business and operations is uncertain and it may be significant and continue to have an adverse effect on its business, operations and the company future financial performance.

Restrictions on import of raw materials may impact its business and results of operations.

The company has in this Red Herring Prospectus included certain Non-GAAP 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 that is applicable across the stainless steel industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

The company is subject to various government regulations and if its fail to obtain, maintain or renew the company statutory and regulatory licenses, permits and approvals required to operate its business, the company business, results of operations and cash flows may be adversely affected. In addition, its have certain obligations under policies imposed and schemes launched by the government that may not be directly beneficial or profitable to the company business.

Changes in technology may affect its business by making our units or equipment less competitive.

The Company will not receive any proceeds from the Offer for Sale portion, and the Promoter Selling Shareholder shall be entitled to the Offer Proceeds to the extent of the Equity Shares offered by him in the Offer for Sale. Its Promoter is therefore interested in the Offer in connection with the Equity Shares offered by them in the Offer for Sale.

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

Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned and paid by it exclusively in connection with the Offer issued by Dun & Bradstreet for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.

If the company is subject to any frauds, theft, or embezzlement by its employees, suppliers or customers, it could adversely affect the company reputation, results of operations, financial condition and cash flows.

Certain statutory filings made by the Company may contain discrepancies/errors with respect to any of the information required therein. Its cannot assure you that the Company shall not be subjected to any liability on account of such discrepancies.

The company face foreign exchange risks that could adversely affect its results of operations and cash flows.

Activities involving the company manufacturing process can be dangerous and can cause injury to people or property in certain circumstances. A significant disruption at any of the company manufacturing facilities may adversely affect its production schedules, costs, sales and ability to meet customer demand.

Unsecured loans of Rs.102.32 million taken by the Company from related party can be recalled at any time.

There is no guarantee that the company Equity Shares will be listed on the Stock Exchanges in a timely manner or at all.

The company Promoter, also being the Managing Director and Chief Financial Officer of the Company, holds Equity Shares in the Company and is therefore interested in the Company`s performance in addition to his remuneration and reimbursement of expenses.

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