Lalithaa Jewellery Mart Limited IPO

The company faces significant competition in the Indian jewellery market. The company's market share in the southern states in India may get adversely affected due to change in market trends, pricing and customer preferences, and we risk losing substantial portion of its customers which will adversely affect the company's business, financial condition, results of operations and prospects.

The company has expanded our stores footprint from 38 stores in Fiscal 2022, to 56 stores as on December 31, 2024 in 46 cities across the States of Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and the Union Territory of Puducherry. If the company is unable to effectively manage or expand its retail network and operations or pursue the company's growth strategies, the company may not achieve the expected level of profitability which may adversely affect its business prospects, financial condition and results of operations.

As of December 31, 2024, we operated our Manufacturing Facilities with 474 Karigars employed by the Company and 89 Karigars employed by Asita Jewellery Manufacturing Private Limited ("Asita") for manufacturing of its products. These Karigars who are on the rolls of the Company and Asita, manufactured 81.88%, 79.78%, 82.15%, 86.47% of our total products available for sale for the nine-month period ended December 31, 2024, Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively. Further, the company has entered into short term agreements with 278 Karigars (as of December 31, 2024), on a non-exclusive basis, for manufacture and supply of jewellery. The Company is dependent on these Karigars for manufacturing its products and any disruptions at the company's Manufacturing Facilities, or loss of these Karigars or failure of these Karigars to adhere to the relevant quality standards may have a negative effect on our reputation, business and financial condition.

Timely procurement of gold, the company's key raw material, as well as the quality and the price at which they are procured, play an important role in the successful operation of its business. The prices and availability of gold depend on factors beyond the company's control, including general economic conditions, competition, production levels and regulatory factors such as import duties. The non-availability or volatility in the cost of gold and absence of hedging facilities may have an adverse effect on its business, results of operations, financial condition and prospects.

The company operates 56 stores in 46 cities across states of Andhra Pradesh, Karnataka, Tamil Nadu, Telangana and Union Territory of Puducherry. As of December 31, 2024, we have 22 stores in Andhra Pradesh, 20 stores in Tamil Nadu, 7 in Karnataka, 6 in Telangana and 1 in Puducherry. Due to the geographic concentration of a l l ( 1 0 0%) the company's stores in the southern regions of India, the company's results of operations and financial condition are subject to fluctuations in regional economic conditions.

The company's inventories as a percentage of its revenue from operations as of December 31, 2024 and as of Fiscals 2024, 2023 and 2022 were 42.34%, 25.57%, 26.08% and 31.31%, respectively. The company's results of operations are dependent on its ability to effectively manage the company's inventory.The company's inability to accurately forecast demand or effectively manage its inventory may have an adverse effect on the company's business, financial condition, results of operations and cash flows.

The Company, Subsidiaries, Promoters, Directors, Key Managerial Personnel and Senior Management are involved in certain legal and regulatory proceedings. Any adverse decision in such proceedings may have an adverse effect on its business, financial condition, cash flows and results of operations.

The Company requires significant amounts of capital for business operations. Further,the company may need to obtain additional financing in the normal course of business from time to time as the company expands its operations.The company may not be successful in obtaining additional funds in a timely manner and/or on favourable terms including rate of interest, primary security cover, collateral security, terms of repayment, or at all. The company's inability to meet its capital requirements, on commercially acceptable terms, may have an adverse impact on the company's business, financial condition and results of operations.

The company has experienced negative cash flows from operating activities in previous periods and cannot assure you that the company will not experience negative cash flows in future periods. Negative cash flows may adversely affect its financial condition, results of operations and prospects.

The company is dependent on its top 10 suppliers of raw materials who contribute more than 72.00% of the company's total cost of raw materials in each of the nine months period ended December 31, 2024 and last three Fiscals and the loss of any of these suppliers or interruptions in the supply of raw materials could adversely affect its business, results of operations and financial condition.