Dam Capital Advi IPO

Objects of the Offer

• Strengthen its competitive position in existing lines of business.

• Enhance its merchant banking platform.

• Further strengthen the institutional equities platform.

• Build other complementary fee-based businesses.

• Explore potential strategic tie-up with a global merchant bank for cross-border transactions.

• Strengthen our talent pool by adding highly qualified and motivated professionals.

• The Company is a fastest-growing merchant bank in India.

• Proven execution with in-depth understanding of sectors and products.

• Institutional equities platform with comprehensive research and execution capabilities.

• Extensive coverage of corporates, financial sponsors and institutional investors, with repeat business.

• Experienced management and professionals, backed by a majority independent board.

• Strong track record of revenue growth and profitability.

• The company operates in a highly regulated environment which is subject to changes in laws and, regulations and government policies. Further, the company is required to maintain various licences and permits for its business from time to time. Any failures or delay in obtaining or renewing licences or permits or non-compliance to the changing laws may adversely affect its business, financial condition and results of operations.

• Its merchant banking and institutional equities business is highly dependent on market and economic conditions. Adverse market or economic conditions could have a significant economic and financial impact on its business.

• The Company and Subsidiary, DAM USA, are subject to periodic inspections by various statutory and regulatory authorities and its international operations increase the risks that the company faces in the USA and from regulators of USA. Non-compliance with the observations made during any such inspections could lead to penalties, adverse regulatory actions or issue of warning letters which may adversely impact its reputation, financial condition and results of operations.

• The company has incurred losses in the stock broking segment in the past. Any further reduction in its brokerage fee could have a material adverse effect on the company business, financial condition, cash flows and results of operations.

• A significant portion of its revenue is from only two income streams, namely, advisory fee income and brokerage, which are highly dependent on general macro-economic conditions, and their continued success is necessary for its business prospects.

• The company has had negative cash flow from operating activities Fiscal 2024 and may continue to have negative cash flows in the future.

• The success of its business operations is dependent on the company Promoter and Managing Director, and on Directors, Key Managerial Personnel and Senior Management as well as its ability to attract, train and retain employees.

• The company faces various risks in relation to its merchant banking business, such as ability to attract and retain clients, investors and employees, execution of the transaction in timely manner, unfavourable market conditions and regulatory environment and its may not be able to sustain the company growth or expand its client base in light of competitive pressure or failures to implement business strategies.

• The Company is unable to trace certain corporate and statutory records pertaining to historical secretarial information in respect of its capital structure build-up and certain records from the filings with the RoC.

• There are operational risks associated with the merchant banking and institutional equities industry including potential errors in research disseminated or advice provided by us which, if realised, may have a material adverse effect on its business, financial condition, cash flows, results of operations and prospects.

• Its ability to pay dividends in the future will depends upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

• A significant decrease in its liquidity could negatively affect the company business and reduce client confidence. Further, it requires margin money to execute trades for the equity broking segment for derivatives and cash equity segments. If these requirements are not met then it may have an adverse effect on its results of operations.

• Certain of its Directors are on the board of directors of companies engaged in a line of business similar to that its Subsidiary, DAM Asset Management Limited, which it intends to enter into. Any conflict of interest that may occur as a result could adversely affect its business, financial condition, results of operations and cash flows.

• The Company has outstanding loans and is subject to certain restrictive covenants in its loan documents, which may restrict the company operations and ability to grow and may adversely affect its business and the company inability in obtaining timely access to borrowings can have an adverse impact on the Company`s liquidity and financial condition.

• Inability to effectively manage its risk management systems can adversely affect the company business, financial conditions, and results of operations.

• The operation of its businesses is highly dependent on information technology, and the company is subject to risks arising from any failures of, or inadequacies in, its IT systems.

• The company is exposed to the risk of human error, malfeasance, inadequate or insufficient due diligence which may not meet the regulator`s expectation or other misconduct, which could adversely impact its business and damage the company brand strength and reputation.

• Its inability to protect or use the company intellectual property rights may adversely affect its business. The company may also unintentionally infringe upon the intellectual property rights of others, any misappropriation of which could harm its competitive position.

• The company has included certain Non-GAAP Measures, industry metrics and key performance indicators related to its operations and financial performance in this Red Herring Prospectus that are subject to inherent measurement challenges. 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. Such supplemental financial and operational information is therefore of limited utility as an analytical tool for investors and there can be no assurance that there will not be any issues or such tools will be accurate going forward.

• The company faces various risks due to its heavy reliance on third-party intermediaries and vendors.

• The company does not own all its premises including its Registered Office and Corporate Office. Any termination or failures by it to renew the lease agreements in a favourable and timely manner, or at all, could adversely affect its business and results of operations.

• The company faces substantial legal and operational risks in safeguarding personal information.

• Its business operations might get impacted on the implementation of SEBI`s consultation paper on SEBI (Merchant Bankers) Regulations, 1992.

• The company may fails to successfully implement its growth strategy, which includes venturing into new lines of business and if the company is unable to successfully run the new businesses profitably, its results of operations and financial condition may be affected.

• There are outstanding litigation proceedings involving the Company and Directors. Any adverse outcome in such proceedings may have an adverse impact on its reputation, business, financial condition, results of operations and cash flows.

• The company has in the past entered into related party transactions and may continue to do so in the future, and there can be no assurance that its will achieve more favourable terms if such transactions are not entered into with related parties.

• Its may not be able to comprehensively detect or eliminate instances of money-laundering, insider trading and anti-terrorism rules and regulations, which could result in criminal and regulatory fines and severe reputational damage. Further, its may fail to detect illegal or improper activities in its business operations.

• The company has contingent liabilities, and its financial condition could be adversely affected if any of these contingent liabilities materialise.

• The company institutional equities business relies on the NSE, BSE and clearing corporations for a significant portion of its business.

• Its institutional equities segment comprising of broking and research might get impacted on the implementation of SEBI`s circular on measures to strengthen equity index derivatives framework for increased investor protection and market stability.

• An inability to maintain adequate insurance cover in connection with its business may adversely affect the company operations and profitability.

• Its Promoters have significant control over it and have the ability to direct its business and affairs; their interests may conflict with the interests of the shareholders.

• The company has delayed payments of certain statutory dues and have also paid interest and fees towards such delayed payments.

• Its Promoters, certain of the company Directors and Key Management Personnel may be interested in it other than in terms of remuneration and reimbursement of expenses, and this may result in conflict of interest with the company.

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

• Its operations could be adversely affected by strikes or increased wage demands by its employees or any other kind of disputes with the company employees.

• The proceeds from the Offer for Sale will be paid to the Selling Shareholders.