Sri Lotus Developers & Realty Ltd IPO

Its business is dependent on the performance of, and the conditions affecting, the real estate micro markets with high geographical concentration in the Western Suburbs of Mumbai. As of June 30, 2025, all ongoing projects and most of the company`s upcoming projects are in the Western Suburbs of Mumbai. Consequently, the company is exposed to risks from economic, regulatory and other changes as well as natural disasters in the Western Suburbs of Mumbai, which in turn may affect our ability to ensure sale of projects and pricing of units in such projects.

Inability to complete its Ongoing Projects and Upcoming Projects by their respective expected completion dates or at all could have a material adverse effect on the company business, results of operations and financial condition.

As of June 30, 2025, the company has 85 unsold units in the Completed Projects and 167 unsold units in its Ongoing Projects. If its not able to sell the company project inventories in a timely manner, then it may adversely affect its business, results of operations and financial condition.

It is difficult to compare the company performance between periods, as its revenues from operations and expenses fluctuate significantly from period to period.

The company is entirely dependent on third party contractors for the construction and development of its Projects and its largest contractor, Shree Gajanand Associates, accounts for 21.71%, 29.89% and 28.10% of the company total expenses for the Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Any failures on their part to perform their obligations could adversely affect its business, results of operations and financial condition.

Increases in prices or shortage of or delay or disruption in supply of, construction materials and contract labour could adversely affect its estimated construction cost and timelines resulting in cost overruns.

The company has experienced negative cash flows in the last three fiscal years.

The Company has (i) in the past not complied and/or delayed in complying with reporting requirements under the provisions of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and the company may be subject to regulatory action by RBI; (ii) in the past not complied and/ or delayed with provisions with reporting requirements under the provisions of Companies Act, 2013 and its Rules.

The company is required to obtain statutory and regulatory approvals, licenses or permits at various stages in the development of its projects. The company may not be able to fully develop its ongoing and upcoming projects as presently contemplated. If the company fails to obtain, maintain or renew its statutory and regulatory approvals or permits, its business, results of operations, financial condition, and cash flows could be adversely affected.

The company has closed its division of film production and distribution, namely Anand Pandit Motion Pictures ("APMP") which had recorded operating losses for the Financial Year ended March 31, 2023. Any losses in the future may adversely impact its business and the value of the Equity Shares.

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

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

Its subsidiaries have incurred losses in Fiscal 2025, 2024 and 2023, and it may adversely affect the company business, results of operations and financial condition. If its unable to generate adequate revenue growth and manage the company expenses and cash flows, its may continue to incur significant losses.

Its current business model is primarily focused on redevelopment projects, the company bids may not always be accepted for society redevelopment projects. Its may not be able to qualify for, compete and win for redevelopment projects, which could adversely affect the company business, results of operations and financial condition.

Information included in this Red Herring Prospectus, including the measurements with respect to the Developable Area and saleable area of its Completed projects, estimated Developable Area and estimated saleable area of the company ongoing and upcoming projects and the expected launch and estimated completion dates of its projects, is based on assumptions and estimates which may change for various reasons.

The company undertake majority of its projects through the company Subsidiaries and currently record majority of its sales through its Material Subsidiaries. The company Subsidiaries may not pay cash dividends on shares that its hold in them. Consequently, The Company may not receive any return on investments in its Subsidiaries.

Sales of its projects may be adversely affected by the ability of the company prospective customers to purchase property which is dependent on availability of financing to potential customers or changes in taxation laws or changes in stamp duty.

Its success largely depends upon the knowledge and experience of the company Promoters, Directors, Key Managerial Personnel, and Senior Management Personnel as well as its ability to attract and retain personnel with technical expertise. The company inability to retain its Promoters, Directors, Key Managerial Personnel and Senior Management Personnel or the company ability to attract and retain other personnel with technical expertise and the attrition rates of its employees that are 13.27%, 4.48% and 8.08% in each of Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively, could adversely affect the company business, results of operations and financial condition.

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

The company intend to utilize the Net proceeds for funding development and construction cost of its projects, and the company is yet to place orders for such requirements. There is no assurance that its would be able to source such requirements in a timely manner or at commercially acceptable prices.

Its projects have long gestation periods and any delays and cost overruns in relation to the company`s Ongoing Projects and Upcoming Projects could adversely affect its business, results of operations, financial condition and prospects.

Its business is capital intensive and requires the company to incur upfront investment for land acquisition construction, regulatory approvals, and project management. Inability to fulfil its working capital requirements adequately could adversely affect the company business, results of operations and financial condition.

Its may not be able to successfully identify and acquire suitable land or development rights, which may affect the company business and growth prospects.

Its redevelopment projects requires compliance of the provisions of various legislations, including Regulations of the Development Control and Promotion Regulation, 2034 ("the DCPR") and the provisions of the Maharashtra Regional and town Planning Act, 1966 ("the MRTP Act"). The compliance inter alia, involves approvals from SRA, MHADA or MCGM, as the case maybe, construction of the rehabilitation and saleable portion units. Any change in laws, rules, regulations and legal uncertainties, including the withdrawal of certain benefits or any non-compliance of any applicable law, may adversely affect its business, results of operations, financial condition and prospects.

Redevelopment projects are subject to certain risks involving existing tenants and applicable Government regulations. Delay in offering possession of the units, any encumbrance in vacant possession of the property and forfeiture of the security deposit made by it, may adversely affect the company business, results of operations, financial condition and prospects.

The company depends significantly on its residential development business, particularly in the luxury and ultra luxury, the success of which is dependent on the company ability to anticipate and respond to customer requirements particularly high and ultra-high net worth individuals.

The Company has entered into, and will continue to enter into, related party transactions and there can be no assurance that such transactions will always be in the best interests of its minority shareholders and will not have an adverse effect on the company business, results of operations, financial condition, cash flows and prospects.

Certain unsecured borrowings have been availed by it which may be recalled by lenders.

Its Promoter, certain members of the Promoter Group, Group Companies and Directors and related entities have interests in number of ventures, which are in businesses similar to its and this may result in potential conflicts of interest with the company.

The company is subject to credit and performance risk from third-party contractors and specialist agencies like architects that assist it on the company`s projects. If its contractors fails to perform as required under the company agreements with them its business, results of operations and financial condition may be adversely affected.

Its inability to collect receivables in time or at all and default in payment from the company customers could result in the reduction of its profits and affect the company cash flows.

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

The company has reversed some of the revenue recognised in prior periods as a result of cancelled bookings for some of its projects and may be required to do so in the future.

The Company does not own certain premises including Registered and Corporate Office and is occupied by it on a leave and license basis from a member of the Promoter Group. A failures to renew the company existing lease arrangements at commercially favourable terms or at all may have a material adverse effect on its business, results of operations and financial condition.

The real estate industry in which the company operates is competitive and highly fragmented resulting in increased competition that may adversely affect its results.

The company is subject to extensive statutory or governmental regulations, including the Real Estate (Regulation and Development) Act, 2016, and a change in laws, rules, regulations and legal uncertainties, including the withdrawal of certain benefits or adverse application of tax laws or any non-compliance of any applicable law, may adversely affect its business, results of operations and financial condition.

In the event that the company is unable to acquire lands or development rights for which the company has entered into agreements for purchase or similar arrangements, or such agreements are held to be invalid or expire, its may not be able to acquire the land and may also lose advances paid towards acquisition of such lands.

Problems pertaining to clearance of encroachment especially in case of redevelopment projects could have a material adverse effect on its business, results of operations and financial condition.

Its may experience difficulties in expanding the company business into additional geographical markets which may adversely affect in its business, results of operations and financial condition.

The company is subject to risks in relation to sales made prior to completion of its projects, and an inability to presale may adversely affect recovery of its capital outlay.

Its may not have sufficient insurance coverage to cover the company economic losses as well as certain other risks, not covered in its insurance policies, which could adversely affect business, results of operations and financial condition.

The company has entered into joint development/redevelopment agreements with third parties to acquire land, development rights or redevelopment rights which may entail title disputes and impose liabilities and obligations on it.

Non-compliance with, and changes in, safety, health and environmental laws could adversely affect its projects.

Its may be subject to third-party indemnification or liability claims, which may adversely affect the company business, results of operations, financial condition and reputation.

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

The average price its Promoters have acquired Equity Shares during the preceding one year is below the Issue Price.

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 our management will have broad discretion over the use of the Net Proceeds.

Failures to successfully implement its business strategies and the company development plans may materially and adversely affect its business, results of operations and financial conditions.

The company has been assigned the trademark and copyright, which are owned by its Promoter, Anand Kamalnayan Pandit, and are exposed to the risk that the company use of these trademarks may be affected by events beyond its control. If the company is unable to protect such intellectual

Changes in technology may affect its business by making the company construction and development capabilities less competitive or obsolete.

Failures or disruption of the company IT systems may adversely affect its business, results of operations and financial condition.

The company operations and the workforce, customers and/ or third parties on property sites are exposed to various hazards, which could adversely affect its business, results of operations and financial condition.

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 Anarock 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 real estate development industry and may not be comparable with financial information of similar nomenclature computed and presented by other companies.