Executive Centre India Limited IPO

The company has incurred loss for the year of Rs.(806.13) million, Rs.(563.15) million and Rs.(73.64) million, total equity of Rs.(27,284.37) million, Rs.(33,461.37) million and Rs.(33,493.70) million as of and for the financial years ended 2025, 2024 and 2023, respectively. This trend may continue in the future. Failures to generate and sustain increased revenues while effectively managing expenses could adversely impact the company's business, results of operations, financial condition and cash flows.

The company has entered into long-term lease agreements with the company's landlords for a Total Leasable Area for Operational Centers of 1.80 million square feet across 86 of its 89 Operational Centers in 14 cities in seven countries, as of March 31, 2025. Any inability to renew such lease agreements could materially and adversely impact on the company's business, financial condition, cash flows, results of operations and prospects.

The company primarilys generate license fees income (accounting for 84.69%, 84.32% and 83.95% of its revenue from operations in Fiscals 2025, 2024 and 2023, respectively). If the company's Clients prematurely terminate their license agreements, fails to renew their license agreements or do not honour their contractual payment obligations, the company's business, financial condition, cash flows, results of operations and prospects could be adversely affected.

The company may not be able to continue to retain existing Clients or attract new Clients in sufficient numbers (the company served 1,560, 1,262 and 1,108 Unique Clients in Fiscals 2025, 2024 and 2023, respectively). Further, if the company's managed solutions Clients choose not to renew their term, it would result in the closure of the company's Operational Center where the company operates managed solutions. Any failures to retain or attract Clients or non-renewal of terms by managed solutions Clients could adversely affect its business, results of operations, cash flows and financial condition.

The company depends on the company's other entities in the TEC Group, for its operations, including the license of the "TEC" brand, relationships with Clients and landlords, certain business teams, and supply chain and technology partners (royalty charges accounted for 5.54%, 4.46% and 2.93% of the company's revenue from operations and service charges accounted for 5.29%, 5.23% and 2.16% of the company's revenue from operations in Fiscals 2025, 2024 and 2023, respectively). Any adverse change in the company's relationship with the other entities in the TEC Group, could have an adverse impact on its reputation, business, financial condition, cash flows, results of operations and prospects.

The company has Lease Payment (accounting for 65.04%, 59.71% and 56.18% of the company's net cash generated from operating activities in Fiscals 2025, 2024 and 2023, respectively) for its Operational Centers based on the company's lease agreements with landlords. Failures to pay lease rentals may lead to termination of the company's lease agreements, adversely impacting on its business, financial condition, cash flows, results of operations and prospects.

The company depends on the company's certain key landlords to lease a significant portion of its Total Leasable Area for Operational Centers (top 10 landlords contributed to 51.11%, 52.83% and 52.31% of the company's Total Leasable Area for Operational Centers) and a significant portion of its Lease Payment was paid to the company's key landlords (Lease Payment paid to top 10 landlords accounted for 22.21%, 21.11% and 23.29% of its total expenses in Fiscals 2025, 2024 and 2023, respectively). Any interruption in or loss of relationship or inability to pay Lease Payment to the company's key landlords could lead to early termination or non-renewal of the company's lease agreements which could adversely affect its business, financial condition, cash flows, results of operations and prospects.

The company depends on certain key Clients for a significant portion of its revenues (our top 10 Clients contributed to 18.41%, 17.44% and 22.48% of the company's license fees income in Fiscals 2025, 2024 and 2023, respectively). Any decrease in revenues from any of the company's key Clients or any loss of these Clients may adversely affect its business, financial condition, cash flows, results of operations and prospects.

A significant number of the company's workstations is located in the company's Centers in Mumbai (Maharashtra), Gurugram (Haryana) and Bengaluru (Karnataka) in India (collectively contributing 60.88%, 62.86% and 62.80% of our Total Workstations Capacity for Operational Centers from India as of March 31, 2025, March 31, 2024 and March 31, 2023 respectively). Adverse development in the locations of the company's Centers in these cities could have a material adverse effect on the company's business, financial condition, cash flows, results of operations and prospects.

A significant portion of the company's revenue from operations is from our Centers located outside India (54.34%, 50.85% and 47.74% of the company's revenue from operations was in Fiscals 2025, 2024 and 2023, respectively). Such international operations expose the company to complex management, legal, tax, operational and economic risks, and exchange rate fluctuation, which could adversely affect its business, financial condition, cash flows, results of operations and prospects.