VVIP Infratech

Risks

• The Company, Directors, Promoters, Subsidiaries and Group Companies may be involved in certain litigation which is currently pending at various stages. Any adverse decisions in these cases against the Company, Promoter and Director may impact business and operations of the Company.

• Its Registered Office is located on leased premises and there can be no assurance that this lease agreement will be renewed upon termination or that the company will be able to obtain other premise on lease on same or similar commercial terms. Any interference with its entitlements as the licensee/lessee or the cancellation of contracts with its licensors/lessors could have a negative effect on the company activities and, as a result, its overall business.

• Its business is working capital intensive. 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 its operations and financial condition.

• Failures of customers to make timely payments could necessitate increased working capital investment and/or reduced profits, thereby impacting its operational and financial performance.

• A significant portion of its operational revenue is derived from a select group of top ten suppliers. The loss of business from any or all of these suppliers could negatively impact its financial performance.

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

• As on date of this Draft Red Herring Prospectus, no purchase orders have been placed for the acquisition of plant and machinery, part of whose financing is intended to be achieved through the Issue.

• The company has had negative cash & cash equivalent generated in the financial year 2021 in the past based on the Restated Summary Information of the Company and its may, in the future, experience similar negative cash flows.

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

• The Company has availed unsecured loan from its Directors which is repayable on demand. Any demand from the lender for repayment of such unsecured loan may affect its cash flow and financial condition.

• In the past, its corporate records have encountered occasional delays in submitting statutory forms to the Registrar of Companies (RoC).

• The company is partially reliant on government contracts for its business, and any shifts in government policies, especially regarding the environment and water treatment, could pose significant risks to its business, finances, and operations. Moreover, delays in securing government approvals could exacerbate these challenges.

• A substantial number of its business agreements including joint ventures encompass clauses specifically designed to manage the risk of project delays. These clauses, known as fine, penalty or damages clauses, serve to motivate timely completion and provide a framework for addressing any unforeseen delays that might arise.

• Its projects are exposed to various implementation and other risks, including risks of time and cost overruns, and uncertainties, which may adversely affect its business, financial condition, results of operations, and prospects.

• Its projects are based on competitive tender method by government authorities. The company may not be able to qualify and accomplish future projects, which could adversely affect its business and results of operations.

• Its Order Book may not be representative of the company future results and its actual income may be significantly less than the estimates reflected in its Order Book, which could adversely affect its results of operations.

• There may be some delays attributable obtaining government and statutory approvals, unanticipated increase in cost, force majeure events, cost overruns or disputes with its joint venture partners.

• The Company has previously engaged in related party transactions and may do so in the future.

• Covid-19 or the outbreak of any other severe communicable disease could have a potential impact on its business, financial condition and results of operations.

• Its profitability will suffer if the company is not able to maintain its pricing, control costs or continue to grow the company`s business through higher client engagements.

• No agreements have yet been finalized with suppliers or consultants for the proposed purchase of Capital Equipment outlined in the Issue`s objectives. Delays in securing these agreements could impact the implementation schedule, potentially leading to increased equipment costs in the future, which could negatively affect its costs, revenue, and profitability.

• Any delay or failure to obtain or renew necessary licenses, approvals, and registrations could lead to the interruption of the Company`s operations.

• Several potential liabilities, known as contingent liabilities, exist for the company. If these liabilities become actual obligations, they could significantly affect its financial health and operating performance.

• Its success depends on the company`s ability to develop and maintain successful relationships with merchants. Misconduct by its employees or failure of its internal processes could harm it by impairing the company`s ability to attract and retain customers.

• Its ability to meet production goals is directly tied to the availability of a qualified workforce, including both skilled and unskilled personnel.

• Bidding for a tender necessitates a comprehensive approach, including thorough project analysis and precise cost estimations. Inaccuracies in cost projections can significantly diminish anticipated returns and profitability assessments. Therefore, meticulous project study is imperative for understanding the project`s scope and requirements, facilitating the preparation of a competitive yet profitable bid.

• The company has issued Equity Shares during the preceding twelve months at a price which may be below the Offer Price.

• If the Company is unable to protect its intellectual property, or if the Company infringes on the intellectual property rights of others, its business may be adversely affected.

• The average cost of acquisition of Equity Shares held by its Promoters could be lower than the Issue Price.

• The weighted average cost of acquisition of its Promoters may be less than the Issue Price.

• Certain of its client contracts can be terminated by the company clients without cause and with limited or no notice or penalty, which could negatively impact its revenue and profitability.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

• The company have not commissioned an industry report for the disclosures made in the section titled industry Overview` and made disclosures on the basis of the data available on the internet and such data has not been independently verified by the company.

• Its may not be successful in implementing the company`s business strategies.

• The company has not made any alternate arrangements for meeting its capital requirements for the Objects of the Issue. Further, the company has not identified any alternate source of financing the `objects of the Issue`. Any shortfall in raising / meeting the same could adversely affect its growth plans, operations and financial performance.

• The company cannot assure payment of dividends on the Equity Shares in the future and its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

• Insurance coverage obtained by its may not adequately protect the company against unforeseen losses.

• Increased losses due to fraud, employee negligence, theft or similar incidents may have an adverse impact on it.

• Third party industry and statistical data in this Draft Red Herring Prospectus may be incomplete, incorrect or unreliable.

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

• The price of its Equity Shares may be volatile, or an active trading market for its Equity Shares may not develop.

• There is no guarantee that the Equity Shares issued pursuant to the Issue will be listed on the SME of Bombay Stock Exchange Limited in a timely manner or at all.

• The price of the Equity Shares may be highly volatile after the Issue.

• You will not be able to sell immediately on Stock Exchange any of the Equity Shares you purchase in the Issue until the Issue receives appropriate trading permissions.

• Sale of Equity Shares by its Promoter or other significant shareholder(s) may adversely affect the trading price of the Equity Shares.

• Any future issuance of Equity Shares may dilute your shareholdings, and sales of the Equity Shares by its major shareholders may adversely affect the trading price of its Equity Shares.

• Under Indian law, foreign investors are subject to investment restrictions that limit its ability to attract foreign investors, which may adversely affect the trading price of the Equity Shares.