Tankup Engineers Ltd

Risks

• The company`s business is dependent on the sale of its products to certain key customers. The loss of any of these customers or loss of revenue from sales to these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

• The company is subject to strict quality requirements, customer inspections and audits, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its reputation and the company business and results of operations and future prospects.

• The company derives a significant portion of its revenue from the sale of its key product i.e. Refuellers. Any decline in the sales of the company key product could have an adverse effect on its business, results of operations and financial condition.

• Its business is substantially dependent on the company design and engineering teams to accurately carryout the estimates and engineering studies for potential orders. Any deviation during the execution of the order as compared to its estimates could have a material adverse effect on the company cashflows, results of operations and financial condition.

• Its may be subject to risks associated with product warranty.

• The Company was incorporated on November 03, 2020, thus, the company has limited operating history as a Company which may make it difficult for investors to evaluate its historical performance or future prospects.

• Its manufacturing activities require deployment of labour and depend on availability of labour. In case of unavailability of such labour, the company business operations could be affected.

• The company generate its major portion of turnover from its operations in certain geographical regions and any adverse developments affecting its operations in these regions could have an adverse impact on the company revenue and results of operations.

• Any delay, interruption or reduction in the supply of raw materials to manufacture its products may adversely affect the company business, results of operations, cash flows and financial condition.

• The restated financial statements have been provided by peer reviewed chartered accountants who is not statutory auditor of the Company.

• Its business is dependent on the company factory and the company is subject to certain risks in its manufacturing process. Breakdowns of the company major machineries or failures to repair or maintain the same could have a material adverse effect on its business, results of operation or financial condition may affect the company business, cash flows, financial condition and results of operations.

• The Company operates under several statutory and regulatory approvals in respect of its operations. Failures to obtain or maintain licenses, registrations, permits and approvals may affect its business and results of operations.

• There are certain discrepancies/errors noticed in some of its corporate records relating to forms filed with the Registrar of Companies and other provisions of Companies Act, 2013. Any penalty or action taken by any regulatory authorities in future, for non-compliance with provisions of corporate and other law could impact the reputation and financial position of the Company to that extent.

• The Company had negative cash flow from operating, investing and financing activity in recent fiscals, details of which are given below. Sustained negative cash flow could adversely impact its business and financial condition.

• Its Order Book may not be representative of the company future results and its actual income may be significantly less than the estimates reflected in the company Order Book, which could adversely affect its results of operations.

• If the company is unable to manage its growth effectively and further expand into new markets its business, future financial performance and results of operations could be materially and adversely affected.

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

• The company has in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company`s financial condition and results of operations.

• Inventories and trade receivables form a major part of its current assets. Failures to manage the company inventory and trade receivables could have an adverse effect on its sales, profitability, cash flow and liquidity.

• The company reliance on Automobile industry for purchase of its major components could have an adverse effect on the company business.

• Its insurance coverage may not be adequate to protect the company against all potential losses to which its may be subject and this may have a material effect on the company business and financial condition.

• The Company is involved in certain legal proceedings and potential litigations. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties/prosecutions and may adversely affect its business and results of operations.

• The company may not be able to adequately protect or continue to use its intellectual property.

• The Registered office & manufacturing unit from where the company carry out its business activities has been obtained by the company on lease/rental basis.

• The company relies on third parties manufactures for certain bought out parts and sub-assemblies. Any failures by or loss of a third-party manufacturer could result in delays and increased costs, which may adversely affect its business.

• The Company has taken unsecured loans that may be recalled by the lenders at any time.

• Activities involving its manufacturing process can cause injury to people or property in certain circumstances. A significant disruption at any of its manufacturing facility may adversely affect the company production schedules, costs, sales and ability to meet customer demand.

• Its contingent liabilities as stated in the company Restated Financial Statements could affect its financial condition.

• Any failures to adapt to industry trends and evolving technologies to meet the company customers` demands may materially and adversely affect its business and results of operations.

• Excessive dependence on Central Bank of India and State Bank of India in respect of Loan facilities obtained by the Company.

• The company is subject to certain restrictive covenants in debt facilities provided to it by the company lenders.

• Under-utilization of its manufacturing capacities may have an adverse effect on the company business, future prospects and future financial performance. Moreover, information relating to capacity utilization of its production facility included in this Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and future production and capacity utilization may vary.

• The Objects of the Issue for which funds are being raised, are based on its management estimates and have not been appraised by any bank or financial institution or any independent agency.

• Any variation in the utilization of the Net Proceeds as disclosed in this Red Herring Prospectus shall be subject to certain compliance requirements, including prior approval of the shareholders of the Company.

• The company operates in a competitive business environment. Failures to compete effectively against its competitors and new entrants in the industry in any of the company business segments may adversely affect its business, financial condition and results of operations.

• Industry information included in this Red Herring Prospectus has been derived from industry sources. There can be no assurance that such third-party statistical, financial and other industry information is complete, reliable or accurate.

• The company could be harmed by employee misconduct or errors that are difficult to detect and any such incidences could adversely affect its financial condition, results of operations and reputation.

• The company has not identified any alternate source of funding and hence any failures or delay on its part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule.

• Any Penalty or demand raised by statutory authorities in future will affect financial position of the Company.

• Its lenders have charge over the company immovable and movable properties in respect of finance availed by it.

• The company ability to pay any dividends will depends upon future earnings, financial condition, cash flows and working capital requirements.

• There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

• Technology failures or Cyber-attacks or other security breaches could have a material adverse effect on its business, results of operation or financial condition.

• Its Promoters and promoter group members have extended personal and corporate guarantee in the loan facilities obtained by the Company, and 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, which may impact their ability to effectively service their obligations and thereby, impact its business and operations.

• Its Promoters and the Promoter Group will jointly continue to retain majority shareholding in the Company after the issue, which will allow them to determine the outcome of the matters requiring the approval of shareholders.

• Its may require further equity issuance, which will lead to dilution of equity and may affect the market price of the company Equity Shares or additional funds through incurring debt to satisfy its capital needs, which the company may not be able to procure and any future equity offerings by it.

• The Issue price of its Equity Shares may not be indicative of the market price of the company Equity Shares after the Issue and the market price of its Equity Shares may decline below the issue price and you may not be able to sell your Equity Shares at or above the Issue Price.

• Certain data mentioned in this Red Herring Prospectus has not been independently verified.

• QIBs and Non-Institutional Bidders 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 and Retail Individual Investors are not permitted to withdraw their Bids after Bid/Issue Closing Date.