Sambhv Steel Tubes Limited - IPO

1. Under-utilization of our manufacturing capacities and an inability to effectively utilize our expanded manufacturing capacities could have an adverse effect on our business, future prospects and future financial performance.

2. An increase in the cost of or a shortfall in the availability of our key raw materials such as iron ore, coal, iron ore pellets, sponge iron and mild steel scrap from our suppliers could have a material adverse effect on our business, results of operations, profitability and margins, cash flows and financial condition.

3. We depend on certain key suppliers for certain raw materials and have not entered into definitive supply agreements with most of our suppliers. A failure by our suppliers to meet their obligations may affect the availability and cost of raw materials, which may adversely affect our business, results of operations, profitability and margins, cash flows and financial condition. Further volatility in the raw material prices and our inability to pass on the increase in cost of raw materials to the customers may impact our results of operations, profitability and margins.

4. Our financing arrangements contain restrictive covenants. This may limit our ability to pursue our business and limit our flexibility in planning for, or reacting to, changes in our business or industry including our plans for expansion and diversification.

5. We derive a substantial portion of our revenue from the sale of ERW pipes and tubes and any loss of sales due to reduction in demand for our products could adversely affect our business, financial condition, results of operations and cash flows. Further, our inability to successfully diversify our product offerings may adversely affect our growth and negatively impact our profitability.

6. Any disruption or shortage of essential utilities could disrupt our manufacturing operations and increase our production costs, which could adversely affect our results of operations.

7. Our return on capital employed has constantly declined. A further decline could adversely affect our business, financial condition, results of operations and cash flows.

8. Our existing and proposed manufacturing facilities and Registered and Corporate Office are located in Chhattisgarh and any adverse changes in the conditions affecting the region can adversely impact our business, results of operations, profitability and margins, cash flows and financial condition.

9. Our revenues are concentrated in north and west India. Any adverse changes in the conditions affecting these regions and our inability to grow our business in new geographic markets may adversely impact our business, results of operations, profitability and margins, cash flows and financial condition.

10. Our existing manufacturing facilities are critical to our business operations. The unexpected shutdown or slowdown of operations at our operational manufacturing facilities could have a material adverse effect on our business, results of operations, profitability and margins, cash flows and financial condition.