Capillary Technologies India Ltd IPO

The company generates a significant portion of its revenues from a limited number of customers. The company's top five and top 10 customers contributed to 38.60% and 55.70% of our revenue from operations in the six-month period ended September 30, 2025, and 43.35% and 58.71%, in Fiscal 2025, respectively. Any loss or reduction of business or termination of contracts from/by these customers could reduce its revenues and materially adversely affect the company's business, results of operations, financial condition, and cash flows.

The company derives a significant portion of its revenue from customers located in North America. In the six-month period ended September 30, 2025 and September 30, 2024 and Fiscals 2025, 2024 and 2023 the company's revenue from the customers located in North America accounted for 56.01%, 57.20%, 56.59%, 48.09% and 20.00%, respectively, of its revenue from operations. Any adverse developments in North America could adversely affect the company's business, results of operations, cash flows and financial condition.

The company may be unable to attract new customers in a cost-effective manner which may adversely affect its business, cash flows, results of operations and financial condition.

The company's success is dependent on its ability to develop and innovate the company's platform, products and solutions in a cost efficient and timely manner. Any failures to do so or inability of its products/solutions to satisfy the company's customers or perform as desired could adversely impact its business, results of operations, cash flows and financial condition.

The company has incurred losses of Rs.68.22 million in the six-month period ended September 30, 2024 and Rs.593.78 million in Fiscal 2024 and Rs.877.19 million in Fiscal 2023 and certain of its Material Subsidiaries have also incurred losses in the past and the company may experience losses in the future which could result in an adverse effect on the company's business, cash flows and financial condition.

The company has undertaken, and may continue to undertake strategic acquisitions, which the company may fails to integrate efficiently and which may not perform in line with its expectations or may be prone to other contingencies.

The company is significantly dependent on its employees for the company's business operations (including for design, development and maintenance of its products and platform, customer acquisition and retention) and the company incur significant expenses in relation to meeting its obligations towards the company's employees. The loss of, or the company's inability to hire, retain, train, and motivate qualified personnel could adversely affect its business, results of operations and financial condition.

The company has had negative cash flows (including cash flows generated from its operating activities) in the recent past and may, in the future, experience similar negative cash flows.

The company proposes to utilize a portion of the Net Proceeds to undertake inorganic growth through acquisitions for which the target(s) are yet to be identified, and may not be identified until the listing and trading of the Equity Shares, and which acquisitions may not be successfully concluded. As on the date of this Red Herring Prospectus, the company have not entered into any definitive arrangements or identified any targets towards any of its future acquisitions. If the Net Proceeds proposed to be utilized towards funding inorganic growth through acquisitions are insufficient for the cost of the company's proposed acquisitions and other strategic initiative, we may have to seek alternative forms of funding.

The company relys on third-party service providers including data centers and cloud computing providers, and any interruption or delay in service from these facilities could impair the delivery of its products and adversely impact the company's business and results of operations. Further, any increase in fee charged by such service providers may have an adverse impact on its profitability.