Inventurus Knowl IPO

Objects of the Offer

• Maximise revenue from existing clients through a "land and expand" approach.

• Focus on large healthcare organizations.

• Move from a "human-led tech-enabled" model to a "tech-led human-enabled" model.

• Bundling our solutions for greater value-add.

• Leverage automation and Generative Artificial Intelligence (AI) to aid our operations.

• Partner with innovative clients for product development and innovation.

• Develop solutions to address the needs of entities moving to "Value-Based Care".

• Comprehensive one-stop platform with diversified offerings across the outpatient and inpatient care value chain serving key stakeholders such as patients, physicians, nurses and healthcare organizations.

• Leveraging digital evolution, transformation and automation technologies to create sustained value based on outcomes delivered.

• Strong brand driven by clinical thought leadership through IKS Advisory Board, a healthcare industry leadership forum, and partnerships with industry players and evident through multiple awards and recognitions.

• Marquee large enterprise clientele that include academic medical centres and healthcare systems, multispecialty and single-specialty medical groups, ancillary healthcare organizations, value enablers, and other outpatient healthcare delivery organizations and client stickiness reflected in revenues from repeat clients of over 98% in the last three Fiscals.

• Sustainable and scalable business model offering clients flexibility and cost-savings and high-touch engagement through access to project executive sponsors and leadership teams creating cross-selling opportunities.

• Healthy financial performance with growth and improving margins.

• Experienced and entrepreneurial driven leadership team.

• There have been certain FEMA related deficiencies in compliances in the past by the Company and some of its existing and erstwhile shareholders, with respect to issuance of securities of the Company, delays in relation to reporting requirements and transfer of securities of the Company. The company has filed compounding applications with the RBI in respect of such contraventions, which are currently pending. Consequently, its may be subject to regulatory actions and penalties/ compounding fees, as applicable.

• The company has outstanding litigation against it, an adverse outcome of which may adversely affect its business, reputation and results of operations.

• If the company fails to successfully develop and introduce new solutions based on artificial intelligence and machine learning technologies and features to existing solutions such as AI-powered speech-to-text solutions, its revenues, operating results and reputation could suffer.

• The healthcare industry is regulated and if the company fails to comply with applicable healthcare laws and government regulations, its could incur financial penalties, be required to make significant operational changes or experience adverse publicity, which could harm its business.

• Various challenges currently faced by the healthcare industry in the United States including the provision of quality healthcare in a competitive environment and managing costs at the same time and consolidation of healthcare organizations in the United States may adversely affect its business, results of operations and financial condition.

• The company revenues are dependent on its ability to maintain and expand existing client relationships and its ability to attract new clients. As of September 30, 2024 and 2023 and as of March 31, 2024, 2023 and 2022, the company had 778, 42, 853, 49 and 45 clients. A loss of one or more clients could have an adverse impact on its results of operations, financial condition and cash flows.

• The company has recently acquired Aquity Holdings to further its strategic objectives. The company inability to successfully integrate the operations of Aquity or the operations of any entities that its may acquires could adversely impact its business, financial condition, results of operations, cash flows and prospects.

• The Company will not receive any proceeds from the Offer. Some of its Shareholders are selling shares in the Offer and will receive proceeds as part of the Offer for Sale.

• Delays in receiving payment of outstanding dues from clients may affect its financial condition and results of operations.

• Its revenues are primarily dependent on revenue generated from healthcare organizations based in the United States, and as a result, the company is subject to the risks of sector and geographic concentration.

• 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.

• Its revenues have historically been concentrated among a limited number of clients. In the six months ended September 30, 2024 and 2023 and in Fiscal 2024, 2023 and 2022, revenue from its top 10 clients was Rs. 4,412.01 million, Rs. 4,121.85 million, Rs. 7,936.51 million, Rs. 6,918.67 million and Rs. 5,204.99 million and accounted for 34.39%, 65.34%, 43.66%, 67.09% and 68.16% of its revenue from operations, respectively. The loss of any of these clients could reduce the company revenues and may adversely impact its business, financial condition, results of operations, cash flows and prospects.

• The company relies on third-party vendors to host and maintain its technology platform. Any deterioration in the company relationships with vendors, termination of agreements with vendors or inability of third-party vendors to provide services, could have an adverse impact on its results of operations, cash flows and financial condition.

• Its offices in Mumbai and Hyderabad in India are located in Special Economic Zones ("SEZ"), and the company is subject to certain regulations and receive certain tax benefits as a result. The company cannot assure you that its will be able to comply with such regulations or that the company will continue to receive such tax benefits in the future.

• Its sales cycle can be long and requires considerable time and effort, which may cause its results of operations to fluctuate.

• If the company cannot implement its technology solutions for clients, integrate the company systems or resolve technical issues in a timely manner, its may lose clients and the company reputation, business, results of operations and prospects may be adversely affected.

• Its may relies on financing from banks or financial institutions to carry on its business operations in the future, and inability to obtain additional financing on terms favorable to it or at all could have an adverse impact on its financial condition.

• The company use of open source software could compromise its ability to offer the company solutions and platform, and subject it to possible litigation which in turn could have an adverse impact on its results of operations, cash flows and financial condition.

• The company could be exposed to risks relating to the handling of personal health information, including sensitive medical data. Its failures to handle such information could subject the company to fines, potential liabilities and legal proceedings, which could adversely impact its reputation, results of operations, financial condition and cash flows.

• The company is exposed to foreign currency exchange rate fluctuations, which may impact its results of operations, impact the company cash flows and cause its financial results to fluctuate.

• As part of its operations, the company witness a churn in the company clients. Any significant churn in its clients over a period could have an adverse impact on its results of operations, cash flows and financial condition.

• Its recently acquired Subsidiary, Aquity Holdings, has operations in Australia and Canada, in addition to the US and India. These international operations may expose it to complex management, legal, tax and economic risks. The company operations may be governed by the laws of foreign jurisdictions and disputes arising from contracts in such jurisdictions may be subject to the exclusive jurisdiction of foreign courts.

• The company relies on internet infrastructure, bandwidth providers, other third parties and its own systems to provide a proprietary enablement platform to its clients, and any failures or interruption in the services provided by these third parties or its own systems could adversely affect the company`s business, financial condition, results of operations and cash flows.

• The Offer Price, market capitalization to revenue from operations multiple and price to earnings ratio based on the Offer Price of the Company, may not be indicative of the market price of the Equity Shares on listing.

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

• The company has high attrition rates and its attrition rate was 14.45%, 24.68%, 44.50%, 54.47% and 54.33% in the six months ended September 30, 2024 and 2023 and in Fiscals 2024, 2023 and 2022, respectively. The company is dependent on its ability to recruit, retain skilled personnel and develop talent. In Fiscal 2024, 2023 and 2022, its employee benefit expenses were Rs. 9,618.86 million, Rs. 4,915.52 million and Rs. 3,734.72 million and accounted for 67.92%, 73.38% and 75.27% of its total expenses in such periods, respectively. The company labor costs could be negatively impacted by competition for staffing, the shortage of experienced personnel and labor union activity.

• The company derives a substantial portion of its revenue from its Subsidiaries and in particular over 27.00% of the company revenues from each of IKS Inc., and Aquity Solutions, LLC in Fiscal 2024. Any adverse changes in the financial health, or any legal restrictions on its Subsidiaries may have an adverse impact on its consolidated revenue from operations, financial conditions, cash flows and business prospects.

• The company has not been able to obtain certain records of educational qualifications of one of its Promoters.

• The company solutions depends on its ability to operate in integration with or supplementing the electronic health record and practice management systems of its clients, and if the company is unable to access these systems then its business and operating results could be adversely affected.

• Its may not be able to keep pace with changes in technology or provide timely enhancements to its platform and solutions which could have an adverse impact on its results of operations, financial condition and cash flows.

• The company Statutory Auditors have included an emphasis of matter paragraph in their Examination Report. Any similar remarks or emphasis of matter paragraphs forming part of audit reports on its financial statements for the future fiscal periods could subject it to additional liabilities due to which its reputation and financial condition may be adversely affected.

• If the company fails to develop its brand, "IKS Health" and maintain the company reputation in a cost-efficient manner, or fails to achieve and maintain market acceptance for its solutions, the company`s business and results of operations could suffer.

• Its industry is highly competitive, and the company may not be able to compete effectively.

• Its proprietary platform may not operate properly, which could damage its reputation, give rise to claims against it or cause inefficient application of its resources, which could harm the company`s business.

• If its security measures or that of the company vendors fails or are breached and unauthorized access to its employees, contractors, or clients` data is obtained, its platform may be perceived as insecure, the company may incur significant liabilities, including through private litigation or regulatory action, its reputation, business, results of operations, cash flows and financial condition may be adversely affected.

• Its business, results of operations and financial condition could be negatively affected if the company incur legal liability, including with respect to its indemnification obligations, in connection with providing the company solutions and services.

• Failures by its clients to obtain proper permissions and waivers may result in claims against it or may limit or prevent the company use of data, which could harm its business.

• The company is subject to risks associated with introduction of new offerings and may not successfully implement its new business propositions. The company lack of resources, logistics, or requisite skill sets to implement and manage new offerings in a cost-efficient and profitable manner could have an adverse impact on its results of operations, cash flows and financial condition.

• The company has witnessed a consistent increase in its restated profit for the year in the last three Fiscals and in the six months ended September 30, 2024 and have also incurred significant borrowings in Fiscal 2024 and in the six months ended September 30, 2024. Its inability to maintain the company profitability levels in future periods or its inability to repay the company debt obligations could have an adverse impact on its results of operations and financial condition.

• Any adverse changes in its key financial and operational performance indicators ("KPIs") could have an adverse impact on its results of operations, cash flows and financial condition.

• The impact of outbreaks of diseases on its business and operations is uncertain, and may have an adverse effect on its business, operations and the company future financial performance.

• Healthcare legislative or regulatory reform measures, including government restrictions on pricing and reimbursement, may have a negative impact on its business and results of operations.

• Efforts to comply with regulatory mandates to increase the use of electronic health information and health system interoperability may lead to negative publicity which could adversely affect its business.

• Tax incentives and tax credits currently available to it could be modified or repealed in the future, which could adversely affect its business and prospects.

• An inability to obtain or renew approvals, licenses, registrations and permits to operate its business in a timely manner, or at all, may adversely affect the company`s business, financial condition, results of operations and cash flows.

• The company is subject to laws and regulations in the United States relating to economic sanctions and the Foreign Corrupt Practices Act, or FCPA, and similar anti-bribery laws. If the company is not in compliance with applicable legal requirements, its may be subject to civil or criminal penalties and other remedial measures, which could materially adversely affect its business, financial condition and results of operations.

• The Unaudited Proforma Financial Information included in this Red Herring Prospectus is not indicative of its future financial condition or results of operations.

• The company has certain contingent liabilities as of September 30, 2024. Any contingent liabilities and commitments in future may adversely affect its financial condition and results of operations.

• Significant differences exist between Ind AS and other accounting principles, such as Indian GAAP, U.S. GAAP and IFRS, which investors may be more familiar with and may consider material to their assessment of its financial condition.

• Internal or external fraud, misconduct, non-compliance with established standard procedures, or mishandling of claims by its employees could adversely affect the company reputation and its results of operations.

• The company is dependent on a number of key personnel, including its senior management, and the loss of or its inability to attract or retain such persons could adversely affect its business, financial condition, results of operations and cash flows.

• Its inability to protect or use the company intellectual property rights or comply with intellectual property rights of others may have a material adverse effect on its business and reputation.

• If the company cannot license rights to use technologies on reasonable terms, its may not be able to commercialize new solutions in the future.

• Its profitability will suffer if the company is not able to maintain its resource utilisation levels and productivity levels.

• Its revenues from operations are subject to seasonal fluctuations.

• The information that the company provide to its clients could be inaccurate or incomplete, which could harm its clients` business, and adversely affect the company`s business, reputation and results of operations.

• Its insurance coverage may not adequately protect the company from all the risks and liabilities its may be subject to, and this may have an adverse effect on the company`s business and revenues.

• All of its offices, including the company registered office, are located on leased premises. Any termination, inability to renew or inability to terminate its lease agreements, or breach of its lease agreements by the counterparty, for the company offices may lead to disruptions in its operations and affect the company`s business operations.

• Its offices are susceptible to risks arising on account of fire, natural disasters or other incidents.

• Certain of its Promoters, Directors, Key Managerial Personnel and Senior Management hold Equity Shares in the Company and are therefore interested in its performance in addition to their remuneration and reimbursement of expenses.

• One of its Promoters, Rekha Jhunjhunwala, does not have adequate experience and has not actively participated in the business activities the company undertake, which may have an adverse impact on the management and operations of the Company.

• Grants of stock options under its employee stock option plans may result in a charge to the company profit and loss account and, to that extent, reduce its profitability and financial condition.

• Certain of its investments may be subject to market risk and the company has not made any provisions for a potential decline of the value of such investments.

• The company has in this Red Herring Prospectus included certain Non-GAAP Measures and certain other industry measures related to its operations and financial performance. These Non-GAAP Measures and industry measures may vary from any standard methodology that is applicable across the Indian healthcare enablement platform industry, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies.

• Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned and paid by it for such purpose.

• 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 of its shareholders will continue to hold majority stake in the Company after completion of the Offer, which will allow them to influence the outcome of matters submitted for approval of its shareholders.

• The company track certain operational metrics with internal systems and tools. Certain of its operational metrics are subject to inherent challenges in measurement which may adversely affect its business and reputation.

• The company has issued Equity Shares (other than bonus issues) during the preceding 12 months from the date of this Red Herring Prospectus at a price which may be lower than the Offer Price and not be indicative of the Offer Price.

• The company cannot assure payment of dividends on the Equity Shares in the future. Its ability to pay dividends in the future will depends on its earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of any future financing arrangements.