Zaggle Prepaid Ocean Services Ltd IPO

Risks

• The company recent revenue growth rates may not be indicative of its future financial performance. The company has limited operating history at its current scale. Failure to effectively manage the company growth could materially and adversely affect the success of its business and/or impact the company margins.

• Laws and regulation governing its business and operations may continue to change and evolve and the introduction of new laws and regulation applicable to the company business may adversely affect its financial condition, results of operations and profitability.

• The company may be unable to retain existing Customers, attract new Customers, convert Customers using its beta or trial versions into paying Customers, or expand usage of the company products within or across Customer organizations.

• The company is dependent on third-party payment networks to operate its prepaid card business.

• A substantial portion of its revenue is generated by Program Fees through the company arrangements with its banking partners. The businesses of its banking partners are regulated by the RBI and any change in the RBI`s policies, decisions and regulatory framework could adversely affect its business, cash flows, results of operations and financial condition.

• The company recognise revenue over the term of the contracts with its Customers. Consequently, downturns in sales may not be immediately reflected in its operating results until one or more quarters following the actual decrease in sales.

• The Company does not have any listed industry peers in India or abroad.

• Failure to effectively develop and expand the company direct sales capabilities could affect its ability to expand usage of the company products within its Customer base and achieve broader market acceptance of its products.

• The company success depends on the company ability to develop and maintain successful relationships with channel partners.

• The company may be unable to successfully integrate its products with software applications that are developed by others, including the company partners, thereby adversely affecting the adoption and usage of its products.

• The company operate in a highly competitive industry, and an inability to compete successfully could materially and adversely affect its business, financial condition, results of operations and future prospects.

• The company funding requirements and proposed deployment of the Net Proceeds are based on management estimates and have not been appraised by any bank or financial institution and its management will have broad discretion over the use of the Net Proceeds. Utilisation of Net Proceeds may be subject to change based on various factors, some of which are beyond itd control.

• A portion of the Net Proceeds may be utilized for repayment or pre-payment of loans taken from ICICI Bank Limited, which is an affiliate of one of its BRLMs.

• One of its objects of the Offer is expenditure towards Customer acquisition and retention, the outcome of which cannot be ascertained.

• Any variation in the utilisation of the Net Proceeds from the terms and conditions as disclosed in this Draft Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders` approval.

• The company is vulnerable to Operational risk, or the risk of loss resulting from, among other factors, inadequate or failed processes, systems or internal controls, theft, fraud, cybersecurity breaches or embezzlement by its employees or partners, or natural disasters.

• There are outstanding legal proceedings involving the Company. Any adverse outcome in such proceedings could adversely affect its reputation, business, cash flows, results of operations and financial condition.

• The company business is subject to seasonality which may cause the company revenues to vary between different quarters in a financial year.

• The company sites, networks, and systems may in the future experience security incidents or breaches, which could potentially damage its reputation and adversely affect its business, cash flows, results of operations and financial condition.

• Real or perceived software errors, interruptions, failures, vulnerabilities, or bugs in its products, defects, or outages of the company technology platform or IT systems and any potential inadequacies in its redundancies, business continuity plans or disaster recovery plans, could impair its ability to effectively provide the company products, services and solutions.

• Service disruptions or failures of the Company`s or its third-party service providers` information systems and networks as a result of computer viruses, misappropriation of data or other bad acts, natural disasters, extreme weather, accidental releases of information or other similar events may disrupt its business, damage the company reputation, expose its to regulatory investigations, actions, litigation, fines and penalties or have a negative impact on its results of operations including but not limited to loss of revenue or profit, loss of Customers or sales and other adverse consequences.

• The company business depends on its reputation, brand identity, intellectual property and knowhow and any harm to them may adversely affect the company business, cash flows, results of operations and financial condition.

• The company inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely affect its business.

• The company had negative operating cash flows in the three-month period ended June 30, 2022 and in Fiscal 2020.

• Certain properties on which its offices operate are neither owned by it nor leased to the company on a perpetual basis. Any breach of the terms or non-renewal of the leave and license agreements may lead to disruptions and affect its business operations.

• The company insurance coverage may not be adequate to cover all future costs and losses the incurrence or magnitude of which are unforeseen or unpredictable and could result in an adverse effect on its business and results of operations.

• The company may be unable to service the company debt obligations in a timely manner or to comply with various financial and other covenants and other terms and conditions of its financing agreements.

• The company efforts to integrate the businesses, technologies, services and products that its acquire or invest in may not be successful.

• The company international expansion efforts may not be successful and may expose it to complex management, legal, tax and economic risks.

• The company has filed compounding applications before the Regional Director, South East Region, Hyderabad for condoning and compounding certain past non-compliances.

• The company marketing efforts may not attract additional Customers on a cost-effective basis, or its may be unable to manage the company marketing and advertising expenses.

• The company relies on third-party providers for many aspects of its business, and any failure to maintain these relationships could harm the company business.

• Any failure of its internal controls over financial reporting may cause adverse unexpected operating results, affect the company reported results of operations or otherwise harm its business and financial results.

• The company Promoters, the company Executive Chairman, its Managing Director and Chief Executive Officer and its Independent Director hold Equity Shares in the Company and are therefore interested in its Company`s performance in addition to their remuneration or benefits and reimbursement of expenses.

• An inability to obtain, maintain or renew requisite statutory and regulatory permits and approvals for its business operations may adversely affect the company business, results of operations and financial condition.

• The company is dependent on a number of key management personnel, including its senior management and the loss of, or the company inability to hire, retain, train, and motivate qualified personnel could adversely affect its business, results of operations and financial condition.

• Its may enter into related party transactions, which may potentially involve conflicts of interest.

• The company has certain contingent liabilities, which if they materialise, may adversely affect its financial condition, cash flows and results of operations.

• The company will continue to be controlled by its Promoters after the completion of the Offer.

• The company has included certain Non-GAAP Measures, industry metrics and key performance indicators related to its operating and financial performance in this Draft Red Herring Prospectus that are subject to inherent challenges in measurement. These Non-GAAP Measures, industry metrics and key performance indicators may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

• Industry information included in this Draft Red Herring Prospectus has been derived from an industry report commissioned and paid for by it exclusively in connection with the Offer.

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

• The company estimates and forward-looking statements may prove to be inaccurate.

• The Company will not receive the entire proceeds from the Offer. Some of its Shareholders, including the company Promoters, are selling Equity Shares in the Offer and will receive proceeds as part of the Offer for Sale.

• The average cost of Equity Shares may be less than the Offer Price.

• The company Restated Financial Information reflects that its had a negative net worth as of March 31, 2022, March 31, 2021 and March 31, 2020.