Resourceful

Risks

• The company has transferred all outstanding loans from Hero Fincorp Limited, NBFC to Deutsche Bank AG w.e.f. 05th February, 2024. There has been a change of Borrower in Objects of the Issue after filing of the Draft Prospectus by the company with the exchange. A significant deviation in the Object could adversely impact the operations and sustainability in absence of any independent monitoring agency.

• A large portion of its business revenue is derived from the company dealership of Yamaha (Commercial). Any adverse developments in the growth, demand or sales for these OEMs could have an adverse effect on its business, results of operations and financial condition.

• The automotive industry is sensitive to changing economic conditions and various other factors. Any decline in demand for vehicles by individuals or entities may adversely impact its business prospects and results of operations.

• The company is subject to the significant influence of, and restrictions imposed by its OEMs pursuant to the terms of its dealership agreements that may adversely impact the company`s business, results of operations, financial condition and prospects, including its ability to expand into new territories and acquire additional dealerships.

• The Company had negative cash flows in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business, financial condition and results of operations.

• Increasing competition among automotive dealerships through online and offline marketing reduces its profit margins on vehicle sales and related businesses.

• Its vehicle sales are impacted by the incentive, marketing, and other programs of the OEMs. Further, any adverse impact on its sales directly impacts the company profit margins and adversely affects its financial conditions and results of operations.

• The company has had certain inaccuracy in relation to regulatory filings to be made with the RoC and the company has made non-compliances of certain provision under applicable law.

• The company may fails to successfully implement its growth strategy, which includes acquiring existing dealerships, diversifying its portfolio and penetrating deeper into existing geographic locations which may adversely affect its financial condition and results of operations.

• The company may be subject to labour unrest, slowdowns and increased wage costs. Increase in any such cost could impact its profitability which may adversely affect the company`s business and results of operations.

• Any termination of existing dealership or closure of its showrooms, retail outlets and service centres, may have an adverse impact on its revenue and result of operations.

• The company vehicles and commercial vehicles sale is subject to seasonality, which may contribute to fluctuations in its results of operations and financial condition.

• The premises of its Registered Office and unit in Delhi are not owned by the company. If the owners of premises does not renew the lease agreement, its business operation may suffer disruption.

• The company inability or failures to maintain optimum inventory levels or any theft of inventory may adversely affect its business, results of operations and financial condition.

• Its operations are subject to various governmental laws and regulations and certain state specific notifications and guidelines. If the company is found to be in purported violation of or subject to liabilities under any of these laws or regulations, or if new laws or regulations are enacted that adversely affect its operations, the company`s business, operating results, and prospects could suffer.

• The company total portion of its business operations are concentrated in the states of Delhi and any adverse developments in these states could have an adverse effect on its business, results of operations and financial condition.

• A failures of its information systems or any security breach or unauthorized disclosure of confidential information could have a material adverse effect on its business.

• The Company is yet to place orders for 100% of the plant, machineries and other assets for its proposed object, as specified in the Objects of the Issue. Any delay in placing orders, procurement of plant & machineries may delay its implementation schedule and may also lead to increase in price of these plant & machineries, further affecting its revenue and profitability.

• The company may be required to make significant capital investments to its existing showrooms, sales outlets, service centers and other premises, the cost of which its may be unable to recoup.

• The Company is using logo it`s Logo, which is not registered with the Trade Mark Authority and the Company has also made an application for registration of its trademark, which is under process of registration. The company is unable to assure that the future viability or value of any of its intellectual property or that the steps taken by it to protect the proprietary rights of the Company will be adequate.

• Fraud or misconduct by its employees could adversely affect the company reputation, business, results of operations and financial condition.

• The company has availed unsecured and secured loans from banks and other financial institutions, which may be recalled on demand thereby impacting its liquidity, and financial position.

• Its business is capital intensive. Difficult conditions in the global as well as Indian capital markets and economy generally may cause it to experience limited availability of funds, which may adversely affect its business and results of operations. The company cannot assure you that its will be able to raise sufficient financing on acceptable terms, or at all.

• The company has entered into, and will continue to enter into, related party transactions in future, which may potentially involve conflicts of interest.

• Its insurance coverage may not be adequate to protect the company against all potential losses, which may have a material adverse effect on its business, financial condition and results of operations.

• The company Promoters will continue to hold a significant equity stake in the Company after the Offer and their interests may differ from those of the other shareholders.

• Excessive dependence on any key managerial personnel for the project for which the issue is being made.

• In addition to normal remuneration, other benefits and reimbursement of expenses to its Promoter, Directors and key managerial personnel or senior management, they are interested to the extent of their shareholding and dividend entitlement thereon in the Company and for the transactions entered into between the Company and themselves as well as between the Company and its Group Companies / Entities.

• Delay in raising funds from the IPO could adversely impact the implementation schedule.

• Its Object has not been appraised by any Bank or Financial Institution. Any significant deviation in the Object could adversely impact its operations and sustainability in absence of any independent monitoring agency.

• There is no monitoring agency appointed by the Company and the deployment of funds are at the discretion of its Management and the company Board of Directors, though it shall be monitored by its Audit Committee.

• Certain information contained in this Draft Prospectus are based on management estimates and the company cannot assure you of the completeness or accuracy of the data.