Globe Civil IPO

For the nine months period ended December 31, 2024 and in Fiscal 2024, Fiscal 2023 and Fiscal 2022, the company derived 10.10%, 29.77%, 57.48% and 54.62%, respectively, of its revenue from operations from construction project receipts business segment from projects developed by Central Public Works Department ("CPWD"), our top customer. Any slowdown or inability to win new project awards from CPWD (whether due to a slowdown or cessation in new projects being undertaken by such entities), an inability to qualify for and successfully compete for new projects or otherwise) or the loss of any of its current significant projects (whether due to restructuring or termination of such projects) could adversely affect its business, results of operations and financial condition.

Its business and profitability are substantially dependent on the demand for construction services, change in budgetary allocation and the requirements for construction projects in the infrastructure and non-infrastructure sectors across India. During the nine months period ended December 31, 2024 and in Fiscal 2024, the Social & Commercial Infrastructure segment (Education institutions) contributed to 61.95% and 47.09%, respectively, of its revenue from operations (construction project receipts). Any reduction in the activity and expenditure levels in such sectors may adversely affect its business and prospects and may reduce the number of projects the company undertake and impede its growth.

For the nine months ended December 31, 2024, the Company submitted successful bids for 11 projects but secured only one, reflecting a success rate of 9.09%, compared to 54.55% in FY24. Its revenues depends upon the award of new contracts and the timing of those awards. Additionally, the competitive bidding process, failures to meet pre-qualification criteria, and non-qualification due to technical issues may hamper its revenue. Consequently, the company results of operations and cash flows may be adversely affected or fluctuate materially from period to period.

For the nine months period ended December 31, 2024 and in Fiscal 2024, Fiscal 2023 and Fiscal 2022, the company derived 3.14%, 11.71%, 14.92% and 11.23%, respectively, of its revenue from operations from trading of goods, primarily TMT steel. Any reduction in trading activity, changes in market demand, or fluctuations in the price of TMT steel may reduce its revenue from this segment and, consequently, impact its total revenue from operations.

As of March 31, 2025, its Order Book, on a consolidated basis, was Rs. 6,691.02 million. Projects included in its Order Book may be delayed, modified or cancelled for reasons beyond its control, or not fully paid for by its clients, which could materially harm the company cash flow position, revenues or profits.

For the nine months period ended December 31, 2024 and for the Fiscal 2024, Fiscal 2023 and Fiscal 2022, its revenue from operations from projects undertaken under JVs contributed 36.40%, 33.36%, 28.98%, and 35.15%, respectively, amounting to Rs. 897.92 million, Rs. 978.44 million, Rs. 575.36 million, and Rs. 891.50 million, respectively. The failures of a JV counterparty or consortium member to perform its obligations could impose additional financial and performance obligations resulting in reduced profits or, in some cases, significant losses, and it may adversely affect its business, results of operations and financial condition.

For the nine months period ended December 31, 2024 and for the Fiscal 2024, Fiscal 2023 and Fiscal 2022, its % contribution to revenue from operations (construction project receipts) from its top ten projects was 98.33%, 89.54%, 92.82% and 99.13%, respectively. Further, the Company`s revenue from operations (construction project receipts) stood concentrated in the top 10 ongoing projects out of the total ongoing projects during the Fiscals 2024, 2023 and 2022. As on March 31, 2025, there were 13 ongoing projects. Any delay or loss of any of these projects could adversely affect its business, cash flow position, results of operations and financial condition.

Its business and profitability are substantially dependent on the availability and cost of its raw materials, and the company is dependent on third party suppliers for meeting its raw material requirements. Any disruption to the timely and adequate supply, or volatility in the prices of, raw materials may adversely impact its business, results of operations and financial condition.

The company is increasingly dependent on sub-contractors for workforce, materials, and specialized work. Subcontractor costs were 35.14% in FY23, 44.57% in FY24, and 54.65% for the nine months ended December 31, 2024-reflecting a rising trend. Its business in manpower intensive, and the company is dependent on an adequate supply and availability of contract labour engaged by its sub-contractors at the company project locations. Any unavailability or shortage of such supply of contract labour for its project sites could adversely affect its operations.

The determination of the Price Band is based on various factors and assumptions and the Issue Price of the Equity Shares, market capitalization and price to earnings ratio based on the Issue Price of the Equity Shares, may not be indicative of the market price of the Company on listing or thereafter and, as a result, you may lose a significant part or all of your investment.

Its business is substantially dependent on revenue from Northern India. In the nine months period ended December 31, 2024 and Fiscal 2024, projects in Delhi contributed 66.07% and 47.19% of its revenue from operations (construction project receipts). Further, its business is concentrated in the states of Delhi, Uttar Pradesh and Karnataka in the nine months period ended December 31, 2024 and Fiscal 2024. Its growth strategy to expand into new geographic areas poses risks. Its may not be able to successfully manage some or all of such risks, which may have a material adverse effect on its revenues, profits and financial condition.

Delay/ default in payment of statutory dues may attract penalties and in turn have an adverse impact on its financial condition.

The company has high working capital requirements. If the company has insufficient cash flows to meet working capital requirements there may be an adverse effect on its results of operations.

The company has incurred indebtedness, and an inability to comply with repayment and other covenants in its financing agreements could adversely affect its business and financial condition.

Timely and successful completion of its projects is dependent upon the company performance and, in the case of many projects, the cooperation of its sub-contractors or joint ventures and any failures or delay in successful completion could adversely affect the construction quality of its developments and adversely affect its profitability and reputation.

Its inability to collect receivables in time or at all, and any default in payment from its clients, could materially and adversely affect its business, cash flows, financial condition and results of operations.

Its Statutory Auditors have included emphasis of matters for the Restated Consolidated Financial Information pertaining to Fiscal 2022 and Fiscal 2023. There can be no assurance that its audit reports for future periods will not contain any qualifications, emphasis of matters or other observations, which may affect its results of operations in such future periods.

The Company was incorporated in 2002, and certain documents filed by it with the Registrar of Companies and certain corporate document are not traceable. The company cannot assure that regulatory proceedings or actions will not be initiated against it in the future which may impact its financial condition and reputation, and the company will not be subject to any penalty imposed by the competent authority in this regard.

The Company has reported certain negative cash flows from its operating activity, investing activity and financing activity. Sustained negative cash flows could impact its growth and business.

Its contingent liabilities could materially and adversely affect the company business, results of operations and financial condition.

Any unsecured loans taken by the Company may be recalled at any time.

Any delays in the schedule of implementation of its proposed objects could have an adverse impact on its business, financial condition and results of operations.

Its industry is highly fragmented and competitive, and the company inability to compete effectively may have a material adverse impact on its business, results of operations and financial condition.

Its Promoters and a member of the company Promoter Group have given personal guarantees for loan facilities obtained by the Company. Any failures or default by the Company to repay such loans in accordance with the terms and conditions of the financing documents could trigger repayment obligations on them.

Any unsecured loans taken by the Company may be recalled at any time.

If the company is not successful in managing its growth, the company business may be disrupted and its profitability may be reduced, which may materially and adversely affect its business, prospects, reputation, financial condition and results of operations.

Its business depends on projects awarded by government or government-owned customers such as CPWD & PSU, which subjects it to a variety of risks.

The company has in the past entered into related party transactions and may continue to do so in the future.

Its success largely depends upon the knowledge and experience of the company Promoters, Directors, Key Managerial Personnel and Senior Management as well as its ability to attract and retain personnel with technical expertise. Its inability to retain the company Directors, Key Managerial Personnel and Senior Management could adversely affect its business, results of operations and financial condition.

Timely and successful completion of its projects is dependent upon the company performance and, in the case of many projects, the cooperation of its sub-contractors or joint ventures and any failures or delay in successful completion could adversely affect the construction quality of its developments and adversely affect its profitability and reputation.

Its business strategy may change in the future and may be different from that which is contained herein. Changes in its business strategy may expose it to additional risks, and an inability to manage such risks may have an adverse effect on its business and results of operations.

Its inability to provide financial and performance guarantees in favour of the company clients may adversely affect its business.

The own and rent equipment and mobilize such equipment at the beginning of each project resulting in increased fixed costs to the Company. In the event the company is not able to generate adequate cash flows, it may have a material adverse impact on its operations.

Given the long-term nature of the projects the company undertake, its may faces various implementation and other risks, and its inability to successfully manage such risks may have an adverse impact on the functioning of its business.

Its may be unable to pre-qualify to bid on certain larger construction projects on its own, and if the company is unable to forge alliances with third parties, its may be precluded from bidding for those large construction projects, which could have an adverse effect on its growth prospects.

Its ability to pass on increased costs may be limited in projects undertaken pursuant to a fixed-price contract.

Its projects expose the company to potential product/project liability, warranty and other claims, which could be expensive, damage its reputation and harm its business.

The majority of its assets have been uninsured over the nine months period ended December 31, 2024 and the last three Fiscals. Its current insurance coverage may not adequately protect it against all possible losses. Any losses exceeding its insurance coverage may adversely and materially affect its business, prospects, reputation, profitability, financial condition and results of operations.

Its may be subject to industrial unrest and increased employee costs, which may adversely affect its business and results of operations.

For its projects, the company is dependent on third parties for the supply of utilities, such as electricity, power and water charges at its project sites, and any disruption in the supply of such utilities could adversely affect its construction activities.

Obsolescence, destruction, theft, breakdowns of our equipment or failures to repair or maintain the same may adversely affect our business, cash flows, financial condition and results of operations.

We have not been able to obtain certain records of the educational qualifications of a Director and have relied on declarations and undertakings furnished by such Director for details of his profile included in this Red Herring Prospectus.

We require certain approvals and licenses in the ordinary course of business and are required to comply with certain rules and regulations to operate our business, any failure to obtain, retain and renew such approvals and licenses or comply with such rules and regulations may adversely affect our operations.

Our inability to identify, obtain and retain intellectual property rights, or to protect or use them, could harm our business. Further, we may infringe upon the intellectual property rights of others, any misappropriation of which could adversely affect our business and reputation.

The company could be adversely affected if its fail to keep pace with technical and technological developments in the construction industry.

The company is exposed to risks stemming from malfunctions, disruptions or breaches of its information technology systems.

The company has incurred indebtedness, and an inability to comply with repayment and other covenants in its financing agreements could adversely affect its business and financial condition.

The company could incur losses under its projects and contracts with the company clients or be subjected to disputes or contractual penalties as a result of delays in delivery or failures to meet contract specifications or stipulated project timelines which may have a material adverse effect on its business, results of operations and financial condition.

Its revenues from the company projects are difficult to predict and are subject to seasonal variations. This may restrict its ability to carry on activities related to its projects and fully utilise the company resources.

There are outstanding legal proceedings against the Company, Promoters, and certain of its Directors. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, results of operations and financial condition.

Various licenses and approvals are to be obtained by it and/or the company clients for undertaking its business and the company construction activities, and the failures to obtain, retain and renew such licenses or approvals in a timely manner, or at all, may adversely affect its business, results of operations and financial condition.

After the completion of the Issue, its Promoters will continue to collectively hold substantial shareholding in the Company.

Any variation in the utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

Its funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

The objects of the Issue include orders for equipment. The company intend to utilise the Net Proceeds for funding its capital expenditure requirements, for which the company has received quotations from various vendors. However, the company has not yet placed orders or entered into any definitive agreements with any of the vendors, and have relied on the quotations received from the vendors.

Any downgrade of its credit ratings could adversely affect the company business.

Its employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.

Certain sections of this Red Herring Prospectus contain information from the D&B Report which the company commissioned and purchased and any reliance on such information for making an investment decision in the Issue is subject to inherent risks.

The company has in this Red Herring Prospectus included certain Non-GAAP Measures that may vary from any standard methodology that is applicable across the construction industry and may not be comparable with financial information of similar nomenclature computed and presented by other companies.

Long delays in the completion of its projects or cost overruns in the past could have an adverse effect on its cash flows, business, results of operations and financial condition.

The Company`s growth rate may not be in line with the growth rate of its industry or the company peers, which could impact its competitive position and financial performance.

The company has issued bonus shares in the past i.e., on July 20, 2024. However, there can no certainty on any bonus issuances in the future.

Its construction projects are subject to factors/ challenges that can influence its costs. There can be no assurance that the company will be able to fully anticipate or mitigate all cost-related risks, and any adverse effect on project costs could materially impact its business, financial condition and results of operations.

A significant portion of the projects executed by the company is in the Social & Commercial Infrastructure segment, more particularly construction of educational institutions. Focus on the Social & Commercial Infrastructure segment may expose it to risks associated with business concentration and adversely affect its business, financial condition and results of operation.

There are certain outstanding material litigations involving the Company, which, if determined adversely, may affect its business operations and reputation.

The Company operates in a regulated environment, and any non-compliance with key regulations and policies applicable to its operations may adversely affect its business, results of operations and financial condition.

Its may faces the risk of orders awarded pursuant to issuance of a Letter of Acceptance (LOA) or Letter of Intent (LOI) being cancelled by clients in the future, due to unforeseen circumstances, for instance due to non-receipt of material approvals, which may affect its business, results of operations, cash flows and financial condition.