Divine Power Energy Ltd IPO

Its business is working capital intensive. The company's inability to meet its working capital requirements may have adverse effect on its results of operations. Further, failures to manage its inventory could also have adverse effect on the company's sales, profitability, cash flow and liquidity.

The company depends on a few suppliers for its raw materials and any delay, interruption or reduction in the supply of raw materials to manufacture its products or volatility in the prices of raw materials, may adversely affect its business, results of operations, financial condition and cash flows.

The company derives a significant portion of its revenue from its top 10 customers. The loss of one or more such customers, the deterioration of their financial condition or prospects, or a reduction in their demand for its products could adversely affect its business, results of operations, financial condition and cash flows.

The company does not have firm commitment agreements with its customers. If the company's customers reduce their purchases from it or choose not to source their requirements from the company, there may be an adverse effect on its business, results of operations, financial condition and cash flows.

Its business is dependent and will continue to depends on the company's manufacturing facilities, and the company is subject to certain risks in its manufacturing process. Any slowdown or shutdown in its manufacturing operations or strikes, work stoppages or increased wage demands by its employees that could interfere with the company operations could have an adverse effect on its business, financial condition and results of operations.

Its cost of production is exposed to fluctuations in the prices of raw material particularly Copper Rod, Aluminium Rod and insulating material like paper, cotton and fiber glass the Company has not entered into any agreement with respect to long-term supply for raw materials required.

The industry segments in which the comapny operate being fragmented, the company faces competition from other players, which may affect its business operational and financial conditions.

The company has in the past entered into transactions with related parties and may continue to do so in the future. These or any future related party transactions may potentially involve conflicts of interest and there can be no assurance that the company could not have achieved better terms, had such arrangements been entered into with unrelated parties.

The Company has reported certain negative cash flows from its financing activity and investing activity, details of which are given below. Sustained negative cash flow could impact its growth and business.

The company is subject to strict quality requirements, regular inspections and audits by its customers, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its business, financial condition and results of operations.