Regaal Resources

Strategic locational advantage of our Manufacturing Facility close to raw material and end consumption markets.

Efficient procurement strategy aided by multifaceted raw material sourcing avenues.

Sustainability driven Manufacturing Facility with high levels of utilization.

Diversified portfolio of products catering to wide range of industries and well positioned to take advantage of growing industry trends.

Established and widespread sales and distribution network.

Experienced promoters and management.

Demonstrated track record of financial performance and growth.

We cater to diverse set of customers, however, our top 10 customers contribute a majority of our sales, and the loss of such customers or a substantial reduction in purchases by such customers will have a material adverse impact on our business, results of operations and financial condition.

Purchase of maize from our top 10 vendors constitute more than 83% of our total purchase of maize, in each of the financial periods disclosed, and we typically do not enter into long-term contracts or arrangements with such vendors. Any loss of such vendors/suppliers or any increase in the price could have adverse impact on our business and our revenue.

The primary raw material required for the manufacturing our products i.e., maize, is seasonal in nature. While our Manufacturing Facility is located in the maize-growing belt, any delays, interruptions or reduction in the supply of raw material to manufacture our products and any abrupt fluctuations in the prices of our raw material may adversely affect the pricing of our products and may have an impact on our business, results of operation, financial condition and cash flows.

We have incurred indebtedness which exposes us to various risks which may have an adverse effect on our business, results of operations and financial conditions. Conditions and restrictions imposed on us by the agreements governing our indebtedness could adversely affect our ability to operate our business.

There is a concentration of sales in certain geographies and the inability to maintain and grow our business in such geographies may have an adverse effect on our business, financial condition, result of operation, cash flows and future business prospects.

Our success depends on our strong relationship with our customers and majority of our customers are repeat customers. However, we do not enter into long-term contracts with our customers and loss of one or more of our customers or reduction in their demand for our products could adversely affect our business, results of operation and financial conditions.

Our success depends on our strong relationship with our distributors and dealers. We do not, generally, enter into long-term contracts and arrangements with our distributors and dealers. Loss of one or more of our distributors and dealers could adversely affect our business, results of operation and financial conditions.

Any failure on our part to effectively manage our inventory may result in an adverse effect on our business, revenue from manufacturing operations and financial condition.

The manufacturing of `maize based speciality products` requires controlled conditions such as certain levels of temperature, a certain standard of hygiene and calibration.

A significant portion of our revenue from operation is generated from sale of native maize starch. A general decline or disruption in the demand or pricing of native maize starch may adversely affect our business operations, results of operations and financial condition.

We cater to diverse end use industries. However, loss of customers in these end use industries may result in an adverse effect on our business, revenue from operations and financial conditions.

We are completely reliant on third-party logistic service providers for transport of our finished products.

Failure to meet quality standards required by our customers for our finished products and processes may lead to cancellation of existing and future orders.

Under-utilization of our currently operational production lines at our manufacturing facility and an inability to effectively utilize our expanded manufacturing capacities could have an adverse effect on our business, future prospects, and future financial performance.

There are certain outstanding legal proceedings involving our Company, Promoters, and Directors which, if determined against us, could have a material adverse effect on our business, cash flows, financial condition and results of operations.

Our Company operates from one manufacturing facility situated at Kishanganj, Bihar. The loss, shutdown or slowdown of operations at any of our Company`s facility could have a material adverse effect on our Company`s results of operations and financial condition.

Our Company`s operations are subject to varied business risks and our Company`s insurance cover may prove inadequate to cover the economic losses of our Company.

Some of the members of our Promoter Group have not consented to the inclusion of, nor have they provided, information or any confirmations or undertakings pertaining to himself or the entities in which they holds interest, which are required to be disclosed in relation to Promoter Group under the SEBI ICDR Regulations in this Draft Red Herring Prospectus. The disclosures relating to these members of the Promoter Group have been included in this Draft Red Herring Prospectus based on information available in public domain. Accordingly, we cannot assure you that the disclosures relating to such members of our Promoter Group are accurate, complete, or updated. Further, details in relation to Connected Persons which may qualify as a member of our Promoter Group have not been disclosed in this Draft Red Herring Prospectus.

Delays or defaults in customer payments and receivables may have an adversely impact our profits and cash flows.

Our operations are dependent on research and development. If we are unable to continuously optimise our processes then our ability to grow, including by expanding our presence across different end-user industries, and, or, compete effectively, might be compromised, which would have an adverse impact on our business and financial condition.

Our business operations require significant working capital. If we experience insufficient cash flows to meet required payments on our working capital requirements, there may be an adverse effect on the results of our operations.

We have leased and, or availed on license, the use of certain properties including our Registered Office from which we operate our business. We cannot assure you that the lease, and, or license agreements will be renewed upon termination or that we will be able to obtain other premises on lease on the same or similar commercial terms.

Our Promoters, who are also the Selling Shareholders, have subscribed to, and purchased, Equity Shares, at a price which could be below the Offer Price. The average cost of acquisition of Equity Shares by our Promoters could also be lower than the Offer Price.

Our operations are subject to manufacturing risk and causing fatal injury to personnel including death and destruction of property and consequent imposition of civil and criminal penalties.

Our future success will depend on our ability to effectively implement our business and growth strategies. Our failure in effectively implementing our business and growth strategies may adversely affect our results of operations.

We are dependent on our Promoters, Key Managerial Personnel, and members of Senior Managerial. Failure to retain or replace them will adversely affect our business.

Our Company has in the past entered into related party transactions and may continue to do so in the future and we cannot assure you that we could not have achieved more favourable terms if such transactions had not been entered into with related parties and that such transactions will not have an adverse effect on our financial conditions and result of operations.

Majority of our directors do not have any experience of being a director in a listed company. This may require them to divert their attention from our business concerns to understand the detailed operations of a listed company.

Any failure to obtain, renew and maintain requisite statutory and regulatory permits, licenses and approvals for our operations from time to time may adversely affect our business.

We export our products to various countries, on account of which we may be subject to significant import duties or restrictions.

Our employee benefit expense is one of the larger components of our fixed operating costs. An increase in employee benefit expense could reduce our profitability. Further any lapse on part of our employees may lead to operational interruption, inabilities, or reputational harm.

There have been certain instances of non-compliance with respect to corporate actions taken by our Company in the past. Further, there have been delays in filing certain statutory forms ROC in the past.

If we are unable to attract new customers, retain customers at existing levels or sell additional products to our existing customers, our revenue growth will be adversely affected.

We do not enter into hedging transactions in respect of our foreign currency exposure. Any losses, on account of foreign currency exchange rate fluctuations may adversely affect our business, results of operations and financial conditions.

We have incurred negative net cash from operating activities and investment activities in the past. Negative net cash in operating activities and investment activities in the future could have an adverse impact on our growth prospectus.

We will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.

Our Promoters and Promoter Group will, even after the completion of the Offer, continue to be our largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.

There have been certain delays in payment of statutory dues in the past. Any delay in payment of statutory dues in future, may result in the imposition of penalties and in turn may have an adverse effect on our business, financial condition, results of operation and cash flows.

Our operations are reliant on human resources. Any disruption in steady and regular supply of workforce for our operations could have an adverse impact on our business operations and financial conditions.

Our Promoters and some of our Directors and Key Managerial Personnel have interests in our Company other than reimbursement of expenses incurred and normal remuneration or benefits.

While our Statutory Auditor has added an mphasis on matters` in our Restated Financial Information, there is no impact on our financial statements.

Inability to obtain or protect our intellectual property rights may adversely affect our business.

Health, safety and environmental matters, including compliance with environmental laws and remediation of contamination, could result in substantially increased capital requirements and operating costs.

We operate in a competitive business environment. Competition from existing players and new entrants and consequent pricing pressures and our inability to compete effectively could have a material adverse effect on our operating margins, business growth and prospects, financial condition and results of operations and may lead to a lower market share.

Our contingent liabilities could materially and adversely affect our business, results of operations and financial condition.

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

Conflicts of interest may arise out of common pursuits between our Company, and entities forming part of promoter group and our group companies.

We have received benefits pursuant to the Bihar Industrial Investment Promotion Policy, 2016. Loss of these benefits could adversely affect our business.

Inability to maintain adequate internal controls may affect our ability to effectively manage our operations which may adversely affect our business operations.

We have obtained unsecured loans from related parties which could be recalled at any time.

We may not be able to secure additional funding in the future. In the event our Company is unable to obtain sufficient funding, it may delay our growth plans and have a material adverse effect on our business, cash flows and financial condition.

A downgrade in our credit ratings, may affect our Company`s ability to avail of debt and could also impact the trading price of the Equity Shares.

Our Company has paid dividends in the past. However, there cannot be any assurance that our Company will be in a position to pay dividends in the future.

This Draft Red Herring Prospectus contains information from an industry report prepared by F&S which we have commissioned and paid for.

We have included certain non-GAAP financial and operational measures related to our operations and financial performance that may vary from any standard methodology that may be applicable across the industry in which we operate, and which may not be comparable with financial, operational or industry related statistical information of similar nomenclature computed and presented by similar companies.

There are certain risks pertaining to the industry in which we operate. If these risks materialise it could adversely affect our business, and financial condition.

One of its Promoters, Anil Kishorepuria, is a party to a legal proceeding for alleged violation of Indian Penal Code and the Prevention of Corruption Act, 1988. Any adverse order in this proceeding could have a material impact on its reputation and business operations.

Purchase of maize from its top 10 vendors constituted more than 83% of the company total cost of purchase of maize, in each of the financial periods disclosed, and the company typically does not enter into long-term contracts or arrangements with such vendors. Any loss of such vendors/suppliers or any increase in the price could have adverse impact on its business and our revenue.

Some of the members of its Promoter Group have not consented to the inclusion of, nor have they provided, information or any confirmations or undertakings pertaining to himself or the entities in which they hold interest, which are required to be disclosed in relation to Promoter Group under the SEBI ICDR Regulations in the Draft Red Herring Prospectus and this Red Herring Prospectus. The disclosures relating to these members of the Promoter Group have been included in the Draft Red Herring Prospectus and this Red Herring Prospectus based on information available in public domain. Accordingly, we cannot assure you that the disclosures relating to such members of its Promoter Group are accurate, complete, or updated. Further, details in relation to Connected Persons which may qualify as a member of the company Promoter Group have not been disclosed in the Draft Red Herring Prospectus and this Red Herring Prospectus.

One of its Promoters i.e., Anil Kishorepuria and certain members of the company Promoter Group were retrained from associating with capital market related activities in the past.

There are certain outstanding legal proceedings involving the Company, Promoters, and Directors, Key Managerial Personnel and members of Senior Management which, if determined against it, could have a material adverse effect on its business, cash flows, financial condition and results of operations.

The Company operates from one manufacturing facility situated at Kishanganj, Bihar. The loss, shutdown or slowdown of operations at the Company`s facility could have a material adverse effect on the Company`s results of operations and financial condition.

There have been certain instances of non-compliance of certain provisions of Companies Act, in relation to certain corporate actions taken by the Company in the past. Further, there have been delays in filing certain statutory forms with ROC in the past.

The company has incurred negative net cash flows from operating activities in the past. Negative net cash flows in operating activities in the future could have an adverse impact on its growth prospectus.

While its Statutory Auditor has added an `emphasis on matters` in the company`s Restated Financial Information, there is no impact on its financial statements.

The company has leased and, or availed on license, the use of certain properties including its Registered Office from which the company operate its business. The company cannot assure you that the lease, and, or license agreements will be renewed upon termination or that the company will be able to obtain other premises on lease on the same or similar commercial terms.

The company cater to diverse set of customers, however, our top 10 customers contribute to a significant portion of its sales, and the loss of such customers or a substantial reduction in purchases by such customers will have a material adverse impact on its business, results of operations and financial condition.

The primary raw material required for the manufacturing its products i.e., maize, is seasonal in nature. While the company Manufacturing Facility is located in the maize-growing belt, any delays, interruptions or reduction in the supply of raw material to manufacture its products and any abrupt fluctuations in the prices of its raw material may adversely affect the pricing of the company products and may have an impact on its business, results of operation, financial condition and cash flows.

The company has incurred indebtedness which exposes us to various risks which may have an adverse effect on its business, results of operations and financial conditions. Conditions and restrictions imposed on the company by the agreements governing its indebtedness could adversely affect the company ability to operate its business.

There is a concentration of sales in certain geographies and the inability to maintain and grow its business in such geographies may have an adverse effect on its business, financial condition, result of operation, cash flows and future business prospects.

Its success depends on the company strong relationship with its customers and majority of the company customers are repeat customers. However, the company does not enter into long-term contracts with its customers and loss of one or more of its customers or reduction in their demand for the company products could adversely affect its business, results of operation and financial conditions.

The company export its products to various countries, on account of which its may be subject to significant import duties or restrictions.

Health, safety and environmental matters, including compliance with environmental laws and remediation of contamination, could result in substantially increased capital requirements and operating costs.

The company has dues which are outstanding to our creditors. Any failures in payment of these dues may have a material adverse effect on its reputation, business and financial condition.

The company has received benefits pursuant to the Bihar Industrial Investment Promotion Policy, 2016. Loss of these benefits could adversely affect its business.

A downgrade in its credit ratings, may affect the Company`s ability to avail of debt and could also impact the trading price of the Equity Shares.

Its cost of procurement of maize could increase if the company is required to procure maize at the minimum support price (MSP) or at higher prices, which could adversely affect its profitability.

Its success depends on the company strong relationship with its distributors and dealers. The company does not, generally, enter into long-term contracts and arrangements with its distributors and dealers. Loss of one or more of the company distributors and dealers could adversely affect its business, results of operation and financial condition.

Any failures on its part to effectively manage the company inventory may result in an adverse effect on its business, revenue from manufacturing operations and financial condition.

The manufacturing of `maize based speciality products` requires controlled conditions such as certain levels of temperature, a certain standard of hygiene and calibration.

A significant portion of its revenue from operation is generated from sale of native maize starch. A general decline or disruption in the demand or pricing of native maize starch may adversely affect its business operations, results of operations and financial condition.

The company cater to diverse end use industries. However, loss of customers in these end use industries may result in an adverse effect on its business, revenue from operations and financial conditions.

The company is completely reliant on third-party logistic service providers for transport of its finished products. Any failures by any of the company transportation and logistics providers to deliver its products on time, or in good condition, or at all, may adversely affect its business, financial condition and results of operations.

Failures to meet quality standards required by its customers for our finished products and processes may lead to cancellation of existing and future orders.

Under-utilization of its currently operational production lines at the company manufacturing facility and an inability to effectively utilize its expanded manufacturing capacities could have an adverse effect on its business, future prospects, and future financial performance.

The Company`s operations are subject to varied business risks and the Company`s insurance cover may prove inadequate to cover the economic losses of the Company.

Delays or defaults in customer payments and receivables may have an adversely impact its profits and cash flows.

The company operations are dependent on research and development. If the company is unable to continuously optimise its processes then the company ability to grow, including by expanding its presence across different end-user industries, and, or, compete effectively, might be compromised, which would have an adverse impact on its business and financial condition.

Its business operations requires significant working capital. If the company experience insufficient cash flows to meet required payments on its working capital requirements, there may be an adverse effect on the results of the company operations.

Its Promoters, who are also the Selling Shareholders, have subscribed to, and purchased, Equity Shares, at a price which could be below the Offer Price. The average cost of acquisition of Equity Shares by its Promoters could also be lower than the Offer Price.

Its operations are subject to manufacturing risk which may cause fatal injury to personnel including death and destruction of property and consequent imposition of civil and criminal penalties.

Its future success will depends on the company ability to effectively implement its business and growth strategies. The company failures in effectively implementing its business and growth strategies may adversely affect its results of operations.

The company is dependent on its Promoters, Key Managerial Personnel, and members of Senior Management. Failures to retain or replace them will adversely affect its business.

The Company has in the past entered into related party transactions and may continue to do so in the future and its cannot assure you that the company could not have achieved more favourable terms if such transactions had not been entered into with related parties and that such transactions will not have an adverse effect on its financial conditions and result of operations.

Majority of its directors do not have any experience of being a director in a listed company. This may require them to divert their attention from the company business concerns to understand the detailed operations of a listed company.

Any failures to obtain, renew and maintain requisite statutory and regulatory permits, licenses and approvals for its operations from time to time may adversely affect the compay business.

Its employee benefit expense is one of the larger components of the company fixed operating costs. An increase in employee benefit expense could reduce its profitability. Further any lapse on part of the company employees may lead to operational interruption, inabilities, or reputational harm.

If the company is unable to attract new customers, retain customers at existing levels or sell additional products to its existing customers, our revenue growth will be adversely affected.

The company does not enter into hedging transactions in respect of its foreign currency exposure. Any losses, on account of foreign currency exchange rate fluctuations may adversely affect its business, results of operations and financial conditions.

The company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.

Its Promoters and Promoter Group will, even after the completion of the Offer, continue to be the company largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.

There have been certain delays in payment of statutory dues in the past. Any delay in payment of statutory dues in future, may result in the imposition of penalties and in turn may have an adverse effect on its business, financial condition, results of operation and cash flows.

Its operations are reliant on human resources. Any disruption in steady and regular supply of workforce for the company operations could have an adverse impact on its business operations and financial conditions.

Its Promoters and some of the company Directors and Key Managerial Personnel have interests in the Company other than reimbursement of expenses incurred and normal remuneration or benefits.

Inability to obtain or protect its intellectual property rights may adversely affect the company business.

The company operates in a competitive business environment. Competition from existing players and new entrants and consequent pricing pressures and its inability to compete effectively could have a material adverse effect on its operating margins, business growth and prospects, financial condition and results of operations and may lead to a lower market share.

Its contingent liabilities could materially and adversely affect the company business, results of operations and financial condition.

Conflicts of interest may arise out of common pursuits between the Company, and entities forming part of promoter group and its group companies.

Inability to maintain adequate internal controls may affect its ability to effectively manage the company operations which may adversely affect its business operations.

Its may not be able to secure additional funding in the future. In the event the Company is unable to obtain sufficient funding, it may delay its growth plans and have a material adverse effect on the company business, cash flows and financial condition.

The Company has paid dividends in the past. However, there cannot be any assurance that the Company will be in a position to pay dividends in the future.

This Red Herring Prospectus contains information from an industry report prepared by F&S which the company has commissioned and paid for.

The company has included certain non-GAAP financial and operational measures related to its operations and financial performance that may vary from any standard methodology that may be applicable across the industry in which the company operates, and which may not be comparable with financial, operational or industry related statistical information of similar nomenclature computed and presented by similar companies.

There are certain risks pertaining to the industry in which the company operates. If these risks materialise it could adversely affect its business, and financial condition.