Crizac IPO

Objects of the Offer

• Deepening and augmenting its agent network in India and globally.

• Expanding its geographic footprint with a particular focus on expanding its network of global institutions of higher education in Ireland, Canada and ANZ and establishing relationship with global institutions of higher education in the USA.

• Diversify its service offerings.

• Enhance its brand profile including its online presence and implement more efficient marketing strategies.

• Inorganic growth to foray into B2C (i.e., catering directly to the student population without an agent in between) business model

• Enhancing its proprietary technology platform.

• One of the leading provider of international recruitment solutions with significant experience of catering to global institutions of higher education;

• Well entrenched relationship with global network of institutions of higher education across diverse disciplines;

• Wide ranging network of educational agents for sourcing students for recruitment.

• Scalable proprietary technology platform.

• Experienced Promoters supported by able professionals with strong domain expertise.

• Track record of financial performance and consistent growth.

• The Company is heavily dependent on few global institutions of higher education for its revenue. Any loss of such global institutions of higher education may have an adverse impact on its business, results of operations and financial conditions.

• The company is heavily dependent on the service of its agents. Loss of any or all such agents may have an adverse impact on its business, results of operations and financial conditions.

• Its success depends on the company continued collaboration with global institutions of higher education. Its inability to maintain the company collaboration with such global institutions of higher education may have an adverse impact on its business, results of operations and financial conditions.

• Its source of revenue is concentrated to certain geographical locations and its inability to operate and grow the company`s business in such countries may have an adverse effect on its business, financial condition, result of operation, cash flow and future business prospects.

• The global institutions of higher education with whom the company work have differing criteria to determine its eligibility to earn revenues from education consultancy services.

• Proforma Consolidated Financial Information included in this Draft Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect its financial condition and results of operations.

• Any change in the regulations or legislations in relation to VISA from foreign countries could adversely affect its ability to conduct the company`s business and impact its financial conditions.

• Any disruption or failure in its proprietary technology platform or the company information technology systems or security breaches in its information technology systems may adversely affect its business, results of operations and prospects.

• A significant portion of its revenues are from outside India. Adverse foreign currency exchange rate fluctuations could adversely impact its business, results of operation and financial condition.

• The company is highly dependent on the services of its Promoters, its key managerial personnels and the company members of senior management. Any loss of their services may impair its ability to operate effectively and may have an adverse impact on its business and financial condition.

• The company is significantly reliant on its Material Subsidiary for its business prospects.

• The Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.

• Inability to obtain or protect its intellectual property rights may adversely affect the company`s business.

• Its entire revenue from operations is generated from the education consultancy services industry. A general decline or disruption in the education industry in relevant jurisdictions may adversely affect its business operations, results of operations and financial condition.

• Delay or default in payments and receivables from global institutions of higher education may have an adverse impact on its profits and cash flow.

• Its Promoters, who are also the Selling Shareholders, have subscribed to, and purchased, Equity Shares, at a price which could be below the Offer Price. The average cost of acquisition of Equity Shares by its Promoters could also be lower than the Offer Price.

• The Company`s operations are subject to varied business risks. The Company maintains negligible insurance cover which may prove inadequate to cover the economic losses of the Company.

• Its business operations are seasonal in nature.

• Majority of its directors including the company independent directors does not have any experience of being a director in a listed company. This may require them to divert their attention from its business concerns to understand the detailed operations of a listed company.

• The company has a large work force and its employee benefit expense is one of the larger components of its fixed operating costs. An increase in employee benefit expense could reduce its profitability. Further, the company`s operations could be adversely affected by work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees.

• The company operates in a competitive industry. Any inability to compete effectively may lead to a lower market share or reduced operating margins.

• The Company does not have any comparable listed peer companies in India and internationally which provide international student recruitment solutions to global institutions of higher education. Therefore, investors must rely on their own examination of accounting ratios of the Company for the purposes of investment in this Offer.

• Its Subsidiary has applied for change of accounting period.

• The Company has inadvertently in the past made corporate filings with factual inaccuracies.

• Any failure to obtain, renew and maintain requisite statutory and regulatory permits, licenses and approvals for its operations from time to time may adversely affect the company`s business.

• The Company has in the past entered into related party transactions and may continue to do so in the future and the company cannot assure you that its could not have achieved more favourable terms if such transactions had not been entered into with related parties and that such transactions will not have an adverse effect on its financial conditions and result of operations.

• Regulatory, legislative or self-regulatory developments regarding privacy and data security matters could adversely affect its ability to conduct the company`s business and impact its financial condition. The company is subjected to stringent data protection laws, in particular the General Data Protection Regulations of the European Union, and other similar laws in jurisdictions where the company operate. Its failure to comply with the provisions of such laws may have an adverse impact on its business operations and the company financial conditions.

• The Company, promoters, directors or its subsidiary, may become involved in legal proceedings in the future, which, if determined against them, could have a material adverse effect on its business, cash flows, financial condition and results of operations.

• The company has dues which are outstanding to its creditors. Any failure in payment of these dues may have a material adverse effect on its reputation, business and financial condition.

• Its future success will depends on the company ability to effectively implement its business and growth strategies failing which the company results of operations may be adversely affected.

• Inability to maintain adequate internal controls may affect its ability to effectively manage the company operations resulting in error or information lapse.

• Its Promoters will, even after the completion of the Offer, continue to be its largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.

• Conflicts of interest may arise out of common pursuits between the Company, Subsidiary, entities forming part of promoter group and its group companies.

• The company may not be able to secure additional funding in the future. In the event the Company is unable to obtain sufficient funding, it may delay its growth plans and have a material adverse effect on its business, cash flows and financial condition.

• The Company has not paid dividends in the last 3 Fiscals and during the current Fiscal on restated basis. There can be no assurance that the Company will be in a position to pay dividends in the future.

• This Draft Red Herring Prospectus contains information from an industry report prepared by F&S which the company have commissioned and paid for.

• Certain non-GAAP financial measures and certain other statistical information relating to its operations and financial performance like Gross Profit, Gross Margin, EBITDA, EBITDA Margin, PAT Margin, Return on Capital Employed, Return on Equity and Net Working Capital as days of Revenues from Operations have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable.

• The Company is heavily dependent on few global institutions of higher education for its revenue. Any loss of such global institutions of higher education may have an adverse impact on its business, results of operations and financial conditions.

• The company is heavily dependent on the service of its agents. Loss of any or all such agents may have an adverse impact on its business, results of operations and financial conditions.

• Its success depends on the company continued collaboration with global institutions of higher education. Its inability to maintain its collaboration with such global institutions of higher education may have an adverse impact on the company`s business, results of operations and financial conditions.

• Its source of revenue is concentrated to certain geographical locations. During Fiscal 2025, Fiscal 2024 and Fiscal 2023, the company derived 95.12%, 96.13%, and 96.42% of its revenue from operations, based on its Proforma Consolidated Financial Information, from the global institutions of higher educations located in The United Kingdom. The company inability to operates and grow its business in such countries may have an adverse effect on its business, financial condition, result of operation, cash flow and future business prospects.

• The global institutions of higher education with whom the company work have differing criteria to determine its eligibility to earn revenues from education consultancy services.

• Proforma Consolidated Financial Information included in this Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect its financial condition and results of operations.

• Any change in the regulations or legislations in relation to Visa from foreign countries or restriction on travel could adversely affect its ability to conduct the company business and impact its financial conditions.

• Adverse geopolitical conditions between the jurisdictions of students and jurisdictions of the global institutions of higher education or factors affecting the safety or security of students could adversely affect its business, results of operations and financial condition.

• Inability to obtain or protect its intellectual property rights may adversely affect the company business.

• Conflicts of interest may arise out of common pursuits between the Company, Subsidiaries, entities forming part of promoter group and its group companies.

• The Company has inadvertently in the past made corporate filings with factual inaccuracies.

• A slowdown in economic growth in India, or in the countries the company operates, or a global economic instability could result in an adverse effect on its business, financial condition and results of operations.

• Any disruption or failures in its proprietary technology platform or the company information technology systems or security breaches in the company information technology systems may adversely affect its business, results of operations and prospects.

• A significant portion of its revenues are from outside India. Adverse foreign currency exchange rate fluctuations could adversely impact its business, results of operation and financial condition.

• The Company also provides services such as marketing, brand management and admission office management to select global institutions of higher education. Its business may be adversely affected if such global institutions of higher education start directly marketing their programs.

• Its success is dependent on the quality of content and delivery of courses and programs of the global institutions of higher education associated with it. Any negative publicity on the content or courses or programs will have an impact on our ability to drive enrolments.

• The company has recently acquired its Material Subsidiary i.e., Crizac Ltd from one of our Promoters i.e. Dr. Vikash Agarwal pursuant to a share purchase agreement dated November 20, 2023. The company is significantly reliant on its Material Subsidiary, Crizac Ltd, for the company business prospects.

• The company is highly dependent on the services of Dr. Vikash Agarwal, its Chairman and Managing Director, Manish Agarwal, its Whole Time Director, the company key managerial personnels and its members of senior management. Any loss of their services may impair our ability to operates effectively and may have an adverse impact on its business and financial condition.

• The Company will not receive any proceeds from the Offer for Sale. The Selling Shareholders will receive the net proceeds from the Offer for Sale.

• The company has a large work force and its employee benefit expense is one of the larger components of the company fixed operating costs. An increase in employee benefit expense could reduce its profitability. Further, The company operations could be adversely affected by work stoppages or increased wage demands by its employees or any other kind of disputes with the company employees.

• The company has leased and availed on rent, the use of properties from which the company operate its business.

• The Company has entered into a Software Purchase Agreement dated December 19, 2023, with one of its Group Companies, i.e., Crizac Technologies Private Limited pursuant to which the Company has purchased all the rights, title, and interest from Crizac Technologies Private Limited of a central application management system software for an aggregate consideration of Rs. 1,035.60 million.

• The company is a B2B education platform for agents and global institutions of higher education and its business operations are completely dependent on enrolment of students from various jurisdictions into global institutions of higher education which are located in a different jurisdiction. If the students and/or agents are involved in Visa fraud or illegal immigration or if the students, agents and / or global institutions of higher education are involved in illegal admission then we may be accused of aiding or abetting these offences, which could have a material adverse effect on its reputation, business and financial condition.

• As part of its growth strategy, the company intend to diversify its service offerings which will include foraying into B2C (i.e., catering directly to the student population without an agent in between) business model through inorganic growth. While this presents significant opportunities for expansion and diversification, the company cannot assure you that its will be able to effectively implement this strategy.

• The company has dues which are outstanding to its creditors. Any failures in payment of these dues may have a material adverse effect on its reputation, business and financial condition.

• Its business operations are asset light, and a substantial portion of our assets comprise monetary assets.

• Its Statutory Auditors have drawn attention to a matter of emphasis in their examination report on the Restated Financial Information and in the assurance report on the Proforma Consolidated Financial Information. However, their opinion is not modified in relation to the matter.

• Certain non-GAAP financial measures and certain other statistical information relating to its operations and financial performance like Gross Profit, Gross Margin, EBITDA, EBITDA Margin, PAT Margin, Return on Capital Employed, Return on Equity and Net Working Capital as # days of Revenues from Operations have been included in this Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable.

• Its Material Subsidiary i.e., Crizac Ltd entered into a commercial agreement dated January 1, 2022 with one of the company`s Group Company, i.e., Crizac Informatics Ltd which has been subsequently terminated pursuant to a termination agreement dated March 15, 2024. Pursuant to the termination agreement Crizac Ltd has agreed to pay GBP 7,150,000.00 (exclusive of VAT) as a break fee to Crizac Informatics Ltd over a period of 18 months from April 1, 2024, unless the commercial agreement is re-instated. We cannot assure you that the company will be successful in growing our business pursuant to the rights acquired by the Company from Crizac Informatics Ltd specifically in respect of the services provided to non-Indian passport holders students.

• Its inability to make timely payment of the company statutory dues could result it into paying interest on the delay, regulatory actions and penalties from regulatory and statutory authorities which in turn could adversely affect its reputation, results of operations and financial condition.

• The Company had exceptional gain and exceptional expenses in the past.

• Its entire revenue from operations is generated from the education consultancy services industry. A general decline or disruption in the education industry in relevant jurisdictions may adversely affect the company business operations, results of operations and financial condition.

• Delay or default in payments and receivables from global institutions of higher education may have an adverse impact on its profits and cash flow.

• Its Promoters, who are also the Selling Shareholders, have subscribed to, and purchased, Equity Shares, at a price which could be below the Offer Price. The average cost of acquisition of Equity Shares by its Promoters could also be lower than the Offer Price.

• The Company`s operations are subject to varied business risks including risk of financial misappropriation, theft and employee negligence. The Company maintains negligible insurance cover which may prove inadequate to cover the economic losses of the Company.

• Its business operations are seasonal in nature.

• Majority of its directors including the company independent directors does not have any experience of being a director in a listed company. This may require them to divert their attention from its business concerns to understand the detailed operations of a listed company.

• The company operates in a competitive industry. Any inability to compete effectively may lead to a lower market share or reduced operating margins.

• The Company does not have any comparable listed peer companies in India and internationally which provide international student recruitment solutions to global institutions of higher education. Therefore, investors must rely on their own examination of accounting ratios of the Company for the purposes of investment in this Offer.

• Its Material Subsidiary had applied for change of accounting period.

• Any failures to obtain, renew and maintain requisite statutory and regulatory permits, licenses and approvals for the company operations from time to time may adversely affect its business.

• The Company has in the past entered into related party transactions and may continue to do so in the future and the company cannot assure you that its could not have achieved more favourable terms if such transactions had not been entered into with related parties and that such transactions will not have an adverse effect on its financial conditions and result of operations.

• Regulatory, legislative or self-regulatory developments regarding privacy and data security matters could adversely affect its ability to conduct the company business and impact its financial condition. The company is subjected to stringent data protection laws, in particular the General Data Protection Regulations of the European Union, and other similar laws in jurisdictions where the company operates. Its failures to comply with the provisions of such laws may have an adverse impact on its business operations and the company financial conditions.

• The Company, promoters, directors or its Subsidiaries, may become involved in legal proceedings in the future, which, if determined against them, could have a material adverse effect on the company business, cash flows, financial condition and results of operations.

• Its future success will depend on the company ability to effectively implement its business and growth strategies failing which the company results of operations may be adversely affected.

• Inability to maintain adequate internal controls may affect its ability to effectively manage the company operations resulting in error or information lapse.

• Its Promoters will, even after the completion of the Offer, continue to be the company largest Shareholders and can influence the outcome of resolutions, which may potentially involve conflict of interest with the other Shareholders.

• Its may not be able to secure additional funding in the future. In the event the Company is unable to obtain sufficient funding, it may delay its growth plans and have a material adverse effect on the company business, cash flows and financial condition.

• The Company has not paid dividends in the last 3 Fiscals and during the current Fiscal on restated basis. There can be no assurance that our Company will be in a position to pay dividends in the future.

• This Red Herring Prospectus contains information from an industry report prepared by F&S which we have commissioned and paid for.