Royal Arc Electrodes Limited - IPO

1. Our revenue is dependent on the domestic market since, it contributes significantly to our total revenue from operations. Any adverse changes in the conditions affecting domestic market could adversely affect our business, results of operations and financial condition.

2. We operate only one manufacturing facility and therefore, any localized social unrest, natural disaster, or breakdown of services, in and around our manufacturing facility or any disruption in production at, or shutdown of our manufacturing facility could have a material adverse effect on our business and financial condition.

3. We may face several risks associated with the proposed expansion in our existing manufacturing facility, which could hamper our growth, prospects, cash flows and business and financial condition.

4. We depend on outside parties for adequate and timely supply of raw materials at commercially acceptable prices. Any disruptions, delay or increase in prices of such material may have a material adverse effect on our business.

5. Our inability to collect receivables and default in payment from our customers could result in the reduction of our profits and affect our cash flows.

6. We have significant working capital requirements. If we are unable to borrow or raise additional financing or furnish bank guarantees or performance bank guarantees in future, it would adversely impact our business, cash flows and results of operations.

7. We are dependent on limited number of suppliers for our raw materials required in our operations. Further, our top 10 (ten) suppliers constituted 71.81%, 64.36%, and 57.08%, respectively of total purchases during Fiscal 2024, Fiscal 2023, and Fiscal 2022 respectively. Our business is dependent on our continuing relationships with our suppliers and any deterioration in our relations with any of them could materially and adversely affect our business, results of operations, cash flows and financial condition.

8. We derive a significant portion of our revenue from a few customers and the loss of one or more such customers, the deterioration of their financial condition or prospects, or a reduction in their demand for our products may adversely affect our business, results of operations, financial condition and cash flows.

9. Commercialization and market development of new products may take longer time than expected and / or may involve unforeseen business risks. Our inability to successfully diversify our product offerings of may adversely affect our growth and negatively impact our profitability.

10. If we fail to manage our growth effectively, we may be unable to execute our business plan or maintain high levels of service and satisfaction, and our business, results of operations, cash flows and financial condition could be adversely affected.