SRM Contractors

Bid for, win and operate hybrid annuity model-based projects.

Expansion of fleet of machinery and equipment.

Focus on rationalizing our indebtedness.

Further enhance its project execution capabilities.

Develop and maintain strong relationships with its clients and project specific joint venture partners.

Leverage core competencies with enhanced in-house integration.

Proven track record of efficient execution of roads, tunnels and slope stabilisation works in the difficult terrain of union territory of Jammu and Kashmir.

Efficient business model of selecting and clustering of our projects in the union territories of Jammu & Kashmir and Ladakh.

Continuous Focus on equipment ownership.

Strong financial performance in the last three financial years.

In-house integrated model.

Experienced Promoters with strong management team.

The company`s business is concentrated in the Union Territory of Jammu & Kashmir and Ladakh and the company is exposed to risks emanating from economic, regulatory and other changes in the Union Territory of Jammu & Kashmir and Ladakh.

Its revenue is majorly concentrated from projects undertaken or awarded by government authorities in Union Territory of Jammu & Kashmir and Ladakh. Any adverse changes in the central or policies in the Union Territory of Jammu & Kashmir and Ladakh may lead to its contracts being foreclosed, terminated, restructured or renegotiated, which may have a material effect on its business and results of operations.

The company derives a significant portion of its revenues from a limited number of clients. The loss of any significant clients may have an adverse effect on its business, financial condition, results of operations, and prospects.

The company may have certain contingent liabilities and its financial condition and profitability may be adversely affected if any of these contingent liabilities materialize.

The company has not yet placed orders in relation to the capital expenditure to be incurred for the proposed purchase of equipment / machineries. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the equipment / machineries in a timely manner, or at all, the same may result in time and cost over-runs.

Infrastructure projects are typically awarded to it on satisfaction of prescribed pre-qualification criteria and following a competitive bidding process. The company business and its financial condition may be adversely affected if new infrastructure projects are not awarded to it or if contracts awarded to the company is prematurely terminated.

Its business is working capital intensive involving relatively long implementation periods. The company requires substantial financing for its business operations. The company indebtedness and the conditions and restrictions imposed on by its financing arrangements could adversely affect the company ability to conduct its business.

The company derives majority of its revenues from construction of Roads, Tunnel and Slope Stabilisation work and the company financial condition would be materially and adversely affected if its fail to obtain new Roads, Tunnel and slope stabilisation work or its current Roads, Tunnel and Slope Stabilisation work are terminated.

The Company, its Promoters, its Directors and its Joint Ventures are involved in litigation proceedings that may have a material adverse outcome.

The company Promoters have issued personal guarantees and/or mortgaged their property in relation to debt facilities availed by it, which if revoked, may requires alternative guarantees, repayment of amounts due or termination of the facilities.

Projects undertaken through a joint venture may be delayed on account of the performance of the joint venture partner or, in some cases, significant losses from the joint venture may have an adverse effect on its business, results of operations and financial condition.

The company is required to furnish financial and performance bank guarantees and letter of credits as part of its business. The company inability to arrange such guarantees and/or letters of credit may adversely affect its cash flows and financial condition.

The company is dependent on its sub-contractors to perform various portions of the contracts awarded to it. Such dependency exposes it to certain risks such as availability and performance of the company sub-contractors.

The company may not be able to successfully manage the growth of its operations and execute the company growth strategies which may have an adverse effect on its business, financial condition, results of operations and future prospects.

The company ongoing projects are exposed to various implementation risks and uncertainties and may be delayed, modified or cancelled for reasons beyond its control, which may adversely affect the company business, financial condition and results of operation.

The company is dependent upon the experience and skill of its promoter, management team and key managerial personnel and senior management personnel. Loss of its Promoter or the company inability to attract or retain such qualified personnel, this could adversely affect its business, results of operations and financial condition.

Its business is subject to seasonal and other fluctuations that may affect its cash flows and business operations.

The company is required to obtain, renew or maintain statutory and regulatory permits, licenses and approvals to operate its business and the company manufacturing facility, and any delay or inability in obtaining, renewing or maintaining such permits, licenses and approvals could result in an adverse effect on its results of operations.

The Company has applied for registration of the trademarks in its name. Until such registration is granted, its may not be able to prevent unauthorised use of such trademarks by third parties, which may lead to the dilution of the company goodwill.

The company have in past entered into related party transactions and its may continue to do so in the future.

The company may be exposed to liabilities arising from defects during construction, which may adversely affect its business, financial condition, results of operations and prospects.

The company operates in the construction industry where there are low entry barriers and is highly competitive. Its failure to successfully compete may adversely affect the company business, financial condition, results of operations and prospects.

Bidding for a tender involves various management activities such as detailed project study and cost estimations. Inability to accurately estimate the cost may lead to a reduction in the expected rate of return and profitability estimates.

The company`s profitability and results of operations may adversely be affected in the event of any disruption in the supply of materials or increase in the price of materials, fuel costs, labour etc.

Any inability to maintain or manage the company workforce could have an impact on its profitability.

Wage pressures and increases in operating costs in India may prevent it from sustaining the company competitive advantage and may reduce its profit margins.

The company funding requirements and the deployment of Net Proceeds are based on management estimates and have not been independently appraised. Any variation in the utilisation of Net Proceeds of the Fresh Issue as disclosed in this Draft Red Herring Prospectus shall be subject to compliance requirements, including prior shareholders` approval.

The company operations may be adversely affected in case of industrial accidents, physical hazards and similar risks at its construction sites, which could expose it to material liabilities, loss in revenues and increased expenses.

The company insurance coverage may not be sufficient or may not adequately protect it against all or any hazards, which may adversely affect the company business, results of operations and financial condition.

Certain sections of this Draft Red Herring Prospectus disclose information from the D&B Report which have been commissioned and paid for by it exclusively in connection with the Issue and any reliance on such information for making an investment decision in the Issue is subject to inherent risks.

Trade receivables and Inventories form a substantial part of its current assets and net worth. Failure to manage the same could have an adverse effect on the company net sales, profitability, cash flow and liquidity.

The company relies on effective and efficient project management. Any adverse change in its project management procedures could affect the company ability to complete projects on timely basis or at all, which may cause it to incur liquidated damages for time overruns pursuant to its contracts.

The company does not own certain premises used by its. Disruption of the company rights as licensee/ lessee or termination of the agreements with its licensors/ lessors would adversely impact the company operations and, consequently, its business.

The company own a large fleet of equipment and vehicles, resulting in fixed costs to the Company. Moreover, the Company is subject to operational risks on account of obsolescence, destruction, breakdown of its equipment and vehicles or failure to repair or maintain such equipment and vehicles. Further, if the company does not continually enhance its business with the most recent equipment and technology, its ability to maintain and expand the company markets may be adversely affected.

Some of its agreements may have certain irregularities.

The company operations are subject to environmental, health and safety laws and regulations.

The company is subject to restrictive covenants under its financing agreements that could limit its flexibility in managing the company business or to use cash or other assets. Any defaults could lead to acceleration of its repayment obligations, cross defaults under other financing agreements, termination of one or more of its financing agreements or force it to sell the company assets, which may adversely affect its cash flows, business, results of operations and financial condition.

There have been instances of delay in filing of Goods and Service Tax (GST) returns and in payment of Provident Fund dues.

The company Promoter holds interest in one of the Promoter Group entities which is authorised to undertake business activities which are similar to the business conducted by the Company.

Employee misconduct, errors or fraud could expose it to business risks or losses that could adversely affect business prospects, results of operations and financial condition.

The company is exposed to the risks of malfunctions or disruptions of information technology systems.

The company Promoters and members of the Promoter Group will continue jointly to retain majority control over the Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

The company future funds requirements, in the form of issue of capital or securities and/or loans taken by it, may be prejudicial to the interest of the shareholders depending upon the terms on which they are eventually raised.

Its ability to pay dividends in the future will depend upon the company future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.

The company Promoters and some of its Directors are interested in the Company, in addition to regular remuneration or benefits and reimbursement of expenses.

The average cost of acquisition of Equity Shares by its Promoters could be lower than the floor price.

The requirements of being a public listed company may strain its resources and impose additional requirements.

If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.

The Company does not have any documentary evidence for the educational qualifications and experience of certain of its Directors.

The Company has during the preceding one year from the date of the Draft Red Herring Prospectus have allotted Equity Shares at a price which is lower than the Issue Price.

Use of similar name as that of the Company`s mark "SRM Contractors" by third parties

The Company is not in strict compliance with the Corporate Social Responsibility as required under the provision of Companies Act 2013.

There is an instances of erroneous filings made by the Company with respect to the appointment of one of the directors.

The Equity Shares have never been publicly traded, and, after the Issue, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Issue Price, or at all.

The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the Issue Price and you may not be able to sell your Equity Shares at or above the Issue Price.

Any future issuance of Equity Shares, or convertible securities or other equity linked securities by the Company may dilute your shareholding and any sale of Equity Shares by its Promoters or members of the company Promoter Group may adversely affect the trading price of the Equity Shares.

Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may have an adverse effect on the value of its Equity Shares, independent of the company operating results.

Rights of shareholders under Indian laws may be more limited than under the laws of other jurisdictions.

QIB and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.

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