Chatha Foods Ltd IPO

The company intend to utilize a portion of the Net Proceeds for setting up the Proposed Manufacturing Facility at Village Tofhapur, Tehsil Dera Bassi, Distt SAS Nagar, Mohali, Punjab, India ("Proposed Manufacturing Facility"). The company is yet to place orders for plant and machinery and apply for requisite government approvals for the Proposed Manufacturing Facility. If the company is unable to commission its Proposed Manufacturing Facility without time and cost overruns or unable to adhere to the schedule of implementation, it may adversely affect its business, results of operations and financial condition.

The purchase of land by the Company for setting up the Proposed Manufacturing Facility is subject to compliance with certain terms and conditions. Failure to comply with such conditions could adversely affect its business and financial condition.

The company derives a substantial portion of its revenue from the sale of products in the non-vegetarian segment. Any loss of business in this segment may adversely affect its business, results of operations, financial conditions and cash flows.

The company Registered Office and godowns/ warehouses are not owned by the Company.

Its Promoter have extended personal guarantees and personal properties as collateral security with respect to various loan facilities availed by the Company. Revocation of any or all of these personal guarantees may adversely affect its business operations and financial condition.

The company has not entered into any arrangements for alternate source of raising the funds required for its "Objects of the Issue". Any shortfall in raising/meeting the same could adversely affect its growth plans, operations and financial performance.

The Company has reported negative cash flow in the past. Any negative cash flows in the future would adversely affect its cash flow requirements, which may adversely affect the company's ability to operate its business and implement the company's growth plans, thereby affecting its financial condition.

Its Manufacturing Facility and operations are concentrated in Mohali region and any adverse developments affecting this region could have an adverse effect on its business, results of operations and financial condition.

As on date the company has not obtained any of the approvals, clearances and permissions as may be required from the relevant authorities for the Proposed Manufacturing Facility. In the event the company is unable to obtain such approvals and permits, its business, results of operations, cash flows and financial condition could be adversely affected.

The company may not be able to adequately protect its intellectual property, which may result in the inability to prevent its competitors from developing, using or commercializing products that are functionally equivalent or similar to its products.