GNG Electronics IPO

India`s largest refurbisher of laptops and desktops and among the largest refurbishers of ICT devices overall, both globally and in India.

We are a company with domestic and international operations with five refurbishing facilities across India, USA and UAE.

Strong global supply chain, established sourcing base with long tail of vendors and wide customer base.

Well - established refurbishing capabilities and state - of - art infrastructure, with focus on quality.

Well positioned to harness global shift to sustainability and growing focus on ESG.

Experienced management team and qualified personnel with significant industry experience.

Track record of profitability and consistent financial performance.

As of Fiscal 2025, Fiscal 2024 and Fiscal 2023, the company derived 75.59%, 67.87% and 79.97%, respectively, of its operational revenue from only sales of laptops and therefore its continued success is necessary for its business and prospects. Any decline in the demand for such product may have an adverse impact on the company business, revenue and profitability.

Increase in the prices of parts and materials essential for its operations may negatively impact the company business and financial performance. Furthermore, its ability to procure these parts and materials may be affected by price fluctuations in the future.

The company has substantial indebtedness which requires significant cash flows to service and limits its ability to operates freely. Its debt servicing coverage ratio for Fiscal 2025, Fiscal 2024 and Fiscal 2023 was 0.25 times, 0.25 times and 0.40 times, respectively. Any breach of terms under the company financing arrangements or its inability to meet the company obligations, including financial and other covenants under its debt financing arrangements may adversely affect the company business and financial condition.

The company revenue generated from outside India accounts for a significant portion of its revenue from operations. As of Fiscal 2025, Fiscal 2024 and Fiscal 2023, the company derived 75.53%, 57.97% and 50.53%, respectively, of its revenue from outside India. Any failure to manage the company business in overseas markets or its inability to grow the company business in new geographic markets may affect its growth, which may have a material adverse effect on the company business, operations, prospects or financial condition.

A substantial portion of its revenues is dependent on the company top 10 customers. During Fiscals 2025, 2024 and 2023 the companu derived 46.59%, 55.77% and 44.14%, respectively of its total revenue from operations from the company top 10 customers. The loss of any of these customers may adversely affect the company revenues and profitability.

The company depends on a limited number of suppliers for its inventory. Any interruption in the availability of inventory may adversely impact its operations. Further, any failures by the company suppliers to provide inventory to it on time or at all, or as per the company specifications and quality standards may have an adverse impact on its ability to meet the company delivery schedules.

A significant part of its total revenue from operations i.e. 66.66%, 49.59% and 50.28% in Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively were through the company Material Subsidiary, Electronics Bazaar FZC. ("EB FZC"), and the company is dependent on the operating income and cash flows generated by EB FZC. Any loss or reduction in the business attributable to its EB FZC, or a change in the company shareholding in EB FZC, could have a material adverse effect on its business, prospects, results of operations, cash flows and financial condition.

The Company`s positive cash flow from operating activities is significantly influenced by changes in working capital loans. A reduction in the availability or utilization of these loans could adversely affect the Company`s operational cash flow and its ability to manage working capital requirements.

The company has experienced reduction in its business-to-consumer ("B2C") sales in Fiscal 2025, Fiscal 2024 and Fiscal 2023.

The company has in the past entered into related party transactions and may continue to do so in the future, which may potentially involve conflicts of interest with the equity shareholders.

As per the 1Lattice Report, the organized sector contributed to 75 % of the total market share of the refurbished personal computer market as of Fiscal 2025. Demand for its refurbished and other categories of ICT Devices may not increase as rapidly as the company anticipate due to a variety of factors, including weakness in general economic conditions, which may have a material and adverse effect on its business, results, of operations and financial conditions.

The company depends on its sales network for the distribution of the company products. Any disruption in such network may adversely affect its business and results of operations.

Its business operations are being conducted on premises leased from third parties. The company inability to continue operating from such premises, or to seek renewal or extension of such leases may have an adverse effect on its business, operations and financial condition.

The company operations are concentrated in certain jurisdictions, such as India, Middle East and USA and any loss of business in such regions may have an adverse effect on its business, results of operations and financial condition.

The company relies on its relationships with certain online marketplaces and disruptions to such relationships or changes in their business practices, may adversely affect its business and the company financial condition, results of operations and cash flows. Its revenue from online sales for Fiscal 2025, Fiscal 2024 and Fiscal 2023 was Rs. 655.14 million, Rs. 245.77 million and Rs.1,243.56 million, respectively.

The company business depends on the reputation and perception of its brand. Any negative publicity or other harm to the company brand or failures to maintain and enhance its brand recognition and maintain quality standards may materially and adversely affect its reputation, business, results of operations and financial condition.

There are outstanding legal proceedings involving the Company, Promoters, and Directors which may have an adverse effect on its business, financial condition and results of operations.

As on March 31, 2025, the company has outstanding dues to certain micro, small and medium enterprises ("MSMEs"), Material Creditors and other creditors of Rs. 8.85 million, Rs. 32.76 million and Rs. 225.56 million, respectively, and any delay or default in making payments to such creditors could adversely affect its business operations, cash flows and reputation.

Its insurance coverage does not cover all the company assets and may not be sufficient or may not adequately protect it against all material hazards, which may have an adverse effect on its business, results of operations, cash flow and financial condition.

The Company has paid income tax in respect of our total income at a concessional tax rate of 22% (plus surcharge of 10% and cess of 4%). Any withdrawal, or termination of, or unavailability of direct/ in-direct tax benefits and exemptions being currently availed by us may have an adverse effect on its business, results of operations, financial condition and cash flows.

The Company`s business model is highly dependent on a reliable and efficient supply chain for the procurement of used laptops, components and other materials necessary for the refurbishment process. Any disruption in this supply chain may have a significant negative impact on the Company`s operations, production schedules, and financial performance.

The electronics refurbishment industry is subject to certain key threats and challenges. Its inability to mitigate any of the potential threats or challenges attributable to the electronics refurbishment industry may affect the company business, results of operations and profitability.

Its inability to effectively manage the company growth or to successfully implement its business plan and growth and expansion strategy may have an adverse effect on the company business, results of operations and financial condition.

The company has experienced a decline in its Gross Margin, PAT Margin and ROCE in the past and its may experience such decline in the future.

Any disruption or shutdown of its refurbishing facilities or warehouses, may adversely affect the company business, results of operations and financial conditions.

The company has certain contingent liabilities which have been disclosed in its Restated Consolidated Financial Information, which if they materialize, may adversely affect the company results of operations, cash flows and financial condition.

There have been certain instances of delays in payment of statutory dues by the Company in the past. Any delay in payment of statutory dues by the Company in future may result in the imposition of penalties and in turn may have a material adverse effect on its business, results of operations and financial condition.

The company has significant working capital requirements and its inability to meet the working capital requirements may have an adverse effect on the company results of operations.

The company purchase inventory in anticipation of sales, and if the company fails to manage its inventory effectively during that period, its business and results of operations may be adversely affected.

The electronics and refurbishment industry in India is dominated by unorganized players. Any inability to maintain its competitive position may adversely affect the company business, prospects and future financial performance.

The electronics devices industry faces challenges in relation to the purchase of counterfeit components by the customers. Any purchase of counterfeit components in the name of `Electronics Bazaar` may adversely affect its reputation and results of operations.

Its inability to effectively collect receivables and default in payment from the company customers could result in the reduction of its profits and adversely affect the company business, financial condition, cash flows and results of operations.

Technological changes, evolving customer requirements and emerging industry trends may affect its business, may render the company current technologies obsolete and may require it to make substantial capital investments. If the company is unable to adapt in a timely manner to changing market conditions, evolving customer requirements or technological changes, its business, financial condition and results of operations may be materially and adversely affected.

Any issues with its product quality or performance may require it to incur additional expenses and warranty costs, damage its reputation and cause the company sales to decline.

An inability to provide adequate customer support and ancillary services may adversely affect its relationship with the company existing and prospective customers, and in turn its business, results of operations and financial condition.

Delivery delays and poor handling by third-party logistics service providers may have an adverse effect on its business, financial condition and results of operations.

Non-compliance with and changes in any of the applicable laws, rules or regulations, including safety, health, environmental and labour laws may have an adverse effect on its business, results of operations and financial condition and cash flows.

Its senior management team, key managerial personnel and other qualified personnel are critical to the company continued success and its may be unable to attract and retain such personnel in the future.

The company business is subject to strikes, work stoppages and/or increased wage demands, as well as other disputes with its employees. Such instances may cause disruptions in the company operations, which may materially adversely affect its business, financial condition and results of operations.

If the company is unable to establish and maintain an effective internal controls and compliance system, over financial reporting, its reputation may be adversely affected.

Its ability to pay dividends in the future will depends on the company earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.

The company faces competition from domestic as well as multinational companies and its inability to compete effectively may have an adverse effect on the company business, operations and financial condition.

The company is exposed to a significant risk from exchange rate fluctuations. If the company fails to manage its foreign currency risk, its business, results of operations and financial condition may be materially and adversely affected.

Any fraud, theft, or embezzlement by its employees, vendors or contractors may adversely affect the company reputation, results of operations and financial condition. Its operations and contracts are subject to anti-corruption laws and regulations, and any failures to comply with such laws and regulations may have an adverse impact on its business and reputation.

Any failures or disruption of its information technology systems may adversely impact the company business and operations.

Its inability to protect any of the company intellectual property rights including misappropriation, infringement or passing off of its intellectual property or failure to obtain the company trademarks may have an adverse impact on its business.

Its Promoters and Promoter Group will continue to exercise significant influence over the Company after completion of the Offer.

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.

If the company is unable to raise additional capital or are unable to obtain financing on favourable terms or at all, its business, results of operations, cash flows and financial condition may be adversely affected.

Cyber threats and non-compliance with and changes in privacy laws and regulations may have an adverse effect on its business, results of operations and financial condition and cash flows.

Certain of its Promoters, members of Promoter Group, Directors and Key Managerial Personnel have interests in the Company in addition to their normal remuneration or benefits and reimbursement of expenses incurred.

Its Subsidiaries (including step down subsidiaries) and other firms operated by one of the company Promoters, have common pursuits vis-�-vis the Company, which may in future lead to conflict of interest.

Some of its Directors may not have prior experience as directors of companies listed on recognized stock exchanges in India.

The company listed peer outperforms us in terms of certain of its key performance indicators. The company cannot assure you that similar differences in performance for these or any other indicators will not continue in the future.

Any variations in its funding requirements and the proposed deployment of Net Proceeds may affect the company business and results of operations.

The Company`s management will have flexibility in utilizing the Net Proceeds, subject to certain approvals. There is no assurance that the Objects of the Offer will be achieved within the timeframe expected or at all, or that the deployment of the Net Proceeds in the manner intended by it will result in any increase in the value of your investment. Further, the funding plan has not been appraised by any bank or financial institution.

Certain information in this Red Herring Prospectus is based on its internal classification methodologies, which may change, and which may or may not be consistent with companies operating in our industry, and hence the company cannot assure you of the completeness or the accuracy of such data.

Certain sections of this Red Herring Prospectus disclose information from the 1Lattice Report which has been prepared exclusively for the Offer and commissioned by the Company and paid for by the Company exclusively in connection with the Offer, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

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

The company is exposed to risks related to export duties and international trade regulations and export incentive.