Krishna Buildspace Limited IPO

Majority of the company's projects have been awarded through competitive bidding process. Failures to complete its projects within contractual time may affect the company's future business prospects and financial performance. Failures to qualify for, complete or win new contracts could negatively impact its business, potentially affecting the company's financial condition, operational results, growth prospects, and cash flow stability.

The company's business is primarily dependent on tenders from public sector undertakings ("PSUs"), which account for approximately 78.74%, 73.17%, 66.22% and 49.86% of its Revenue from Operations for the six months period ended September 30, 2025 and for the Fiscals 2025, 2024 and 2023, respectively. However, delays or a lack of tenders from PSUs, along with adverse changes in government policies, could materially impact its business through contract foreclosures, terminations, restructurings, or renegotiations, affecting the company's operations and financial performance.

For the six months period ended September 30, 2025 and as at end of Fiscals 2025, 2024, and 2023, the company's trade receivables amounted to Rs.543.84 million, Rs.660.33 million, Rs.461.46 million, and Rs.286.72 million, respectively, out of which Rs.151.90 million, Rs.58.88 million, Rs.148.62 million, and Rs.17.33 million, aggregating to 27.93%, 8.92%, 32.21% and 6.04%, respectively, of its total trade receivables was outstanding for a period exceeding six months from their respective due dates of payments. the company may not be able to collect receivables due from its customers, in a timely manner, or at all, which may adversely affect our business, financial condition, results of operations and cash flows.

The company's business typically requires significant amounts of working capital and historically, the company's business growth has been dependent on high working capital requirements. If the company experience insufficient cash flows or are unable to access suitable financing to meet working capital requirements and loan repayment obligations, the company's business, financial condition and results of operations could be adversely affected.

The company has Order Book of Rs. 5,241.74 million as on December 15, 2025. However, the company's Order Book may not be representative of its future results, as projects included in the company's Order Book particularly for the projects where the company is the lowest bidder, may be cancelled, modified, or delayed beyond its control, leading to significant deviations from estimated income and adversely affecting the company's business, reputation, financial condition, and future prospects.

The company is subject to proceedings initiated by the State of Gujarat, through its Road & Building divisions at Navsari in relation to a show cause notice and a subsequent order placing our `AA' class contractor registration for road and building works with the Executive Engineer, Junagadh, in abeyance, which, if decided adversely, may materially and adversely affect its business operations and reputation.

The company is dependents on its top ten customers who contribute to 93.54%, 92.87%, 92.16% and 87.39% of its revenue from operations during the six months period ended September 30, 2025 and in Fiscals 2025, 2024 and 2023, respectively and the loss of any of these customers or a significant reduction in purchases by any of them could adversely affect the company's business, results of operations and financial condition.

The company's operations are geographically concentrated in the western region of India, particularly in the State of Gujarat which contributed to 40.74%, 35.70%, 32.07% and 29.01 of its revenue from operations in six months period September 30, 2025 and in Fiscals 2025, 2024 and 2023 respectively. Any adverse developments in these regions could materially affect the company's business and growth prospects.

The majority of the company's Order Book and its revenue from operations are from the projects undertaken for the residential, industrial, institutional and waste management sectors. Any reduction in the activity and expenditure levels in such sectors may adversely affect its business and prospects, and may reduce the number of projects the company undertake and impede its growth. Further, any significant social, political, or economic changes in these sectors could adversely affect the company's business, results of operations, financial condition, and cash flows.

The company has entered into, and will continue to enter into, related-party transactions which may potentially involve conflicts of interest.