Allied Engineering Works Limited IPO

The company's business largely depends upon its top 10 customers (93.49%, 92.38% and 86.68% of the company's revenue from operations in Fiscals 2025, 2024 and 2023, respectively). The loss of any of these customers could have an adverse impact on the company's business, financial condition, results of operations and cash flows.

The company's revenue is significantly dependent on the sale of smart energy meters (93.17%, 69.50% and 25.00% of the revenue from operations in Fiscals 2025, 2024 and 2023, respectively). Any variation in government policies, including adverse changes in the government policies for the deployment of smart energy meters, or the company's inability to secure orders for smart energy meters from electricity utilities or advanced metering infrastructure solution providers, could have an adverse impact on the company's business, results of operations, financial condition, and cash flows.

The company depends on a few suppliers for the supply of its raw materials. In Fiscal 2025, 2024, and 2023, the cost of raw materials sourced from the company's top 10 suppliers accounted for 62.72%, 64.91%, and 49.25% of the company's total cost of raw materials, respectively. Any disruption in supply or increase in raw material prices from these suppliers could have a significant negative impact on the company's business, financial condition, results of operations, and cash flows.

The company depends on orders for its products from electricity utilities through a competitive bidding process (22.14%, 53.06% and 16.20% of the company's revenue from operations generated from electricity utilities in Fiscal 2025, 2024 and 2023, respectively). The company may not be able to qualify for, compete and secure orders, which could adversely affect its business and results of operations.

The company imports certain raw materials. In Fiscal 2025, 2024, and 2023, the cost of imported raw materials accounted for 48.30%, 47.77%, and 30.63% of the company's total raw material purchases, respectively. Any restrictions imposed by the GoI on the import of such raw materials or any increases in import duties on these raw materials, may adversely affect its business, results of operations and prospects.

The company has derived a significant portion of our revenues from the sale of the company's energy meters in the states of Uttar Pradesh, Punjab and Gujarat (56.46%, 22.14% and 8.90% of our revenue from operations generated from the sale of energy meters in Uttar Pradesh, Punjab and Gujarat in Fiscal 2025, respectively). Consequently, any adverse developments affecting its operations in such regions, could have an adverse impact on the company's business, results of operations, financial condition and cash flows.

All of the company's manufacturing facilities are located in National Capital Territory (NCT) of Delhi which exposes its operations to potential risks arising from local and regional factors such as adverse social and political events, weather conditions and natural disasters in this region.

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

The company relies on the company's manufacturing facilities and any unscheduled or prolonged disruption or quality control issues at such facilities could adversely affect its business, financial condition, results of operations, and cash flows.

The orders for the supply of smart energy meters included in the company's order book may be delayed, modified, cancelled not fully paid, or terminated by the company's customers, and, therefore the company's order book is not necessarily indicative of its future revenue or profit.