Capillary Technologies India Ltd IPO

Our Company, certain of our Subsidiaries, and our Directors are involved in outstanding legal proceedings. Any adverse outcome in such proceedings may have an adverse impact on our reputation, business, financial condition, results of operations and cash flows.

We changed our business model for campaign services in Fiscal 2025. Accordingly, there are certain differences in the manner in which revenue from campaign services has been recognized in the Restated Consolidated Statement of Profit and Loss for Fiscal 2024 and Fiscal 2023 as compared to six-month period ended September 30, 2025 and Fiscal 2025.

If we fail to integrate our offerings with a variety of operating systems, software applications and hardware that are developed by others, our service may become less marketable and less competitive or obsolete, and our operating results would be harmed.

Our reliance on borrowings to fund our working capital requirements has increased during the six-month period ended September 30, 2025 and the last three Fiscals and any inability to refinance or repay such borrowings in a timely manner could adversely affect our business, results of operations, financial condition and cash flows.

We propose to utilise Rs. 1,430 million from the Net Proceeds towards funding our cloud infrastructure cost. We have entered into certain arrangements with technology service providers and have made certain annual spend commitments which are higher than the amount proposed to be utilised from the Net Proceeds towards funding our cloud infrastructure cost. Any inability to incur such expenditures in full will strain our resources and, may result in variations in the deployment of Net Proceeds.

There have been certain instances of delays in payment of statutory dues by our Company in the past. Any delay in payment of statutory dues by our Company in future, may result in the imposition of penalties and in turn may have an adverse effect on our business, financial condition, results of operation and cash flows.

The financial information of certain of our foreign Subsidiaries, which are not material, included in the Restated Consolidated Financial Information have not been audited and are based on management information, due to which our consolidated financial statements and investor confidence may be adversely affected.

We have witnessed delays in repayment of loans/borrowings in the past for which our Statutory Auditors have included certain remarks in the Companies (Auditor's Report) Order, 2020, for the years ended March 31, 2024 and March 31, 2023. We cannot assure you that any similar or other matters prescribed under the Companies (Auditor's Report) Order, 2020, will not form part of our financial statements for the future fiscal periods, which could have an adverse effect on our reputation, the trading price of the Equity Shares, results of operations, cash flows and financial condition.

Our corporate Promoter issued share warrants to one of our customers as part of our revenue contract. The cost of issuing such warrants are recognized in our books of accounts and may continue to impact our revenue, profitability and assets until the entire cost of such warrant issuance is amortised.

An inability to maintain adequate insurance cover in connection with our business may adversely affect our operations and profitability.