Stallion India IPO

Our revenue from operations depends on sale of Refrigerant Gases and is restricted to certain geographies only. Any changes or a decline in demand, could adversely affect our ability to grow or maintain our sales, earnings and cash flow.

Increases in the cost of raw materials as a percentage of our revenue from operations could have a material adverse effect on our results of operations and financial condition.

We import our raw materials with respect to our business operations majorly from China. Any restrictions on import of raw materials may impact our business and results of operations.

We are subject to risks arising from foreign exchange rate movements.

Zhejiang Sanmei Chemical Industry Co. Ltd. (Sanmei) have issued a notice through its Legal representative demanding USD 12,51,290.00 i.e Rs. 949.85 lakhs. In the event that, if any legal or regulatory proceedings are initiated, any adverse outcome arising therefrom could affect our reputation, financial condition and cash flow.

In the past our Company had negative cash flows from our operating activities, investing activities as well as financing activities, further, we may experience negative cash flows in the future.

The supply of our products is subject to periodical fluctuations with a significant portion of our turnover concentrated in the months from February to May.

We do not have agreements having commitment on part of our customers to purchase or place orders with us. If our customers choose not to source their requirements from us, there may be a material adverse effect on our business, financial condition, cash flows and results of operations.

We may experience loss of, or a decrease in, revenue due to lower blending/processing levels.

We have submitted an application to the Expert Advisory Committee ("EAC") of the Institute of Chartered Accountants of India ("ICAI") for their opinion on the accounting treatment related to the "Sanmei". The decision is currently pending. Any adverse opinion given by the EAC could adversely impact the financial position and reputation of the Company.

Our Statutory Auditors have included in their examination report emphasis of matters that were included in the underlying auditor`s reports on our restated financial information.

We operate in a competitive business environment. A competitive market, pricing pressures from competitors, including efficiency improvements, may affect business growth, financial health, and profitability of our Company.

Our revenue from operations depends on one product i.e. "R-32". Any changes in the customer demand or a decline in the demand of the said product, or delays in the placement of orders by the customers, may affect our ability to grow or maintain our sales, earnings, and cash flow.

We currently propose to establish a new facility in Mambattu, Andhra Pradesh and expand our existing plant in Khalapur, Maharashtra. Any delays in new facilities setup, due to unforeseen events, may lead to cost overruns and implementation delays, impacting our business growth.

We have not placed orders in relation to purchase of machineries. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the machineries in a timely manner, or at all, the same may result in time and cost over-runs.

We have 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.

Our top 10 and top 2 suppliers contribute majority of our purchase during the period ended September 30, 2024 and for Fiscal 2024, Fiscal 2023 and Fiscal 2022. Any delay in or shortage from one or more of them may adversely affect our operations.

The Company has entered into distributorship agreement with Honeywell International Inc. for supply of its HFC refrigerant gases including R-410a, R404a, R134a and also the next generation HFO`s like R1234yf. If for reason beyond our control Honeywell terminates the agreement we may face an adverse effect on our business prospects, financial condition, results of ongoing operations and reputation.

We have high working capital requirements. Our inability to meet our working capital requirements may have a material adverse effect on our business, financial condition and results of operations.

Activities involving our blending process can be dangerous and can cause injury to people or property in certain circumstances. A significant disruption at any of our blending Unit may adversely affect our production schedules, costs, sales and ability to meet customer demand.

There are outstanding legal proceedings involving our Company, our Promoters and our Directors. Failure to defend these proceedings successfully may have an adverse effect on our business prospects, financial condition, results of ongoing operations and reputation.

The industry in which we operate are subject to certain uncertainties including environmental, regulatory and economic factors which can have adverse effect on our business.

The irreversible blending process of HCFCs, HFCs, and HFOs gases poses a risk due to the inability to separate or reverse the blended components.

Our Promoter and Promoter Group will be able to exercise significant influence and control over our Company after the Offer and may have interests that are different from those of our other shareholders.

Our Company`s ability to pay dividends in the future will depend on a number of factors, including but not limited to our Company`s earnings, capital requirements, contractual obligations, applicable legal restrictions and overall financial position.

Any defaults or delays in payment by a significant portion of our customers, may have an adverse effect on cash flows, results of operations and financial condition.

We are required to obtain, renew or maintain certain statutory and regulatory permits and approvals required to operate our business, and if we fail to do so in a timely manner or at all, we may be unable to fully or partially operate our business and our results of operations may be adversely affected.

Any adverse change in regulatory requirements governing our products and the products of our customers, may adversely impact our business, prospects, results of operations and financial condition.

We are dependent on third parties for the transportation and timely delivery of our products to customers. Any failure by or loss of a third party transport service provider could result in delays and increased costs, which may adversely affect our business.

Our Company, in the past, has delayed in the payment of statutory dues.

We encounter numerous threats and weakness that can impact our operations and profitability in the industry we operate.

Our inability to accurately forecast demand for our products or manage our inventory may have an adverse effect on our business, results of operations and financial condition.

The proposed Initial Public Offer includes Fresh Issue and Offer for Sale by the Promoter. The proceeds from the Offer for Sale component of the Offer shall be received directly by the Promoter Selling Shareholder.

We do not own the premises in where our registered office and facilities are located and the same are on lease arrangement. Any termination of such lease/license and/or non-renewal thereof and attachment by Property Owner could adversely affect our operations.

Any inability on our part to manage our growth or implement our strategies effectively could have a material adverse effect on our business, results of operations and financial condition.

Our growth will depend on our ability to build our brand and failure to do so will negatively impact our ability to effectively compete in this industry.

Dependency on promoter owned Trademark. The logo we use is not registered in the name of Company.

We are subject to safety, health, environmental, labor, workplace and related laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on our business, financial condition and results of operations.

We are subject to stringent labour laws or other industry standards and any strike, work stoppage, Lock-out or increased wage demand by our employees or any other kind of disputes with our employees could adversely affect our business, financial condition and results of operations.

We have issued Equity Shares during the last one year at a price that may be below the Issue Price.

Our contingent liabilities could adversely affect our business financial condition.

Our Promoter have provided personal guarantees to loan facility availed by us, which if revoked may require alternative guarantees, repayment of amount due or termination of the facilities.

Our indebtedness and the restrictions imposed by our financing arrangements could adversely affect our ability to conduct our business and operations.

Our performance depends to a large extent on the efforts and abilities of our individual Promoters, Directors, Key Managerial Personnel. The loss of or diminution in the services of our individual Promoter, Directors or Key Managerial Personnel could have a material adverse effect on our business, financial condition and results of operations.

Our Promoters & Directors are interested in our Company in addition to their remuneration and reimbursement of expenses.

Our insurance coverage may not be adequate and this may have a material adverse effect on our business financial condition and results of operation.

Any variation in the utilization of the Net Proceeds of the Fresh Issue as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior Shareholders` approval.

Information relating to the historical capacity of our facilities is based on various assumptions and estimates and actual production may differ significantly from such estimated capacities.

If we fail to maintain an effective system of internal controls, we may not be able to successfully manage, or accurately report, our financial risks.

We have used information from the CARE Report, which we have commissioned and paid for purposes of confirming our understanding of the industry exclusively in connection with the Offer and any reliance on such information is subject to inherent risk.

The determination of the Price Band is based on various factors and assumptions and the Offer Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchanges. Investors bear the risk of fluctuations in the price of Equity Shares and there can be no assurance that a liquid market for our Equity Shares will develop following the listing of our Equity Shares on the Stock Exchanges.

Any future issuance of Equity Shares may dilute your shareholding and sale of Equity Shares by the Promoters may adversely affect the trading price of the Equity Shares.

The Equity Shares have never been publicly traded, and, after the Offer, the Equity Shares may experience price and volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the price of the Equity Shares may be volatile, and you may be unable to resell the Equity Shares at or above the Offer Price, or at all.

QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage after submitting a Bid.

Requirements of being a listed company may strain our resources.

Pursuant to listing of the Equity Shares, we may be subject to pre-emptive surveillance measures like Additional Surveillance Measure ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.

Investors will not be able to sell immediately on an Indian stock exchange any of the Equity Shares they purchase in the Offer.

There is no assurance that our Equity Shares will be listed on the Stock Exchanges in a timely manner or at all or that once listed, will remain listed on the Stock Exchange.

Upon listing, we may be subject to additional costs/unanticipated expenses arising from the obligations that a listed public company has to comply with, under the applicable regulatory framework in India.