Milky Mist Dairy Food Limited IPO

The company does not have long term agreements with suppliers for the company's other raw materials (in addition to raw milk) and its cost of such other raw materials (excluding raw milk) accounted for 18.89%, 16.30%, and 15.43% of the company's revenue from operations in Fiscal 2025, 2024 and 2023, respectively. An increase in the cost of or a shortfall in the availability of such raw materials could have an adverse effect on its business, results of operations and financial condition.

The Company is required to obtain certain statutory approvals, licenses, registrations and permits to operate its business, manufacturing facilities and Milk Chilling Centres. Failures to obtain or renew such approvals in a timely manner, or at all, or comply with laws in relation to safety, health and environmental protection may adversely affect the company's business, financial condition, results of operations and cash flows.

Improper, processing or storage of the company's raw materials or products, or spoilage of and damage to such raw materials and products, or any real or perceived contamination in the company's products, could subject us to regulatory action, damage its reputation and have an adverse effect on business, results of the company's operations, financial condition and cash flows.

The company may be unable to comply with food safety laws and other applicable regulations in relation to the company's products and manufacturing facilities, which may adversely affect its business, results of operations, financial condition and cash flows.

The company incurs significant expenses towards strengthening its brand visibility and brand equity and expect to continue to incur such expenditure in the future. The company's advertisement and business promotion expenses in Fiscals 2025, 2024 and 2023 accounted for 3.03%, 1.13%, and 1.18% of its revenue from operations in Fiscal 2025, 2024 and 2023, respectively. An inability to maintain or enhance the popularity of our brands or any increase in the company's marketing expenditure may adversely impact its business, results of operations, financial condition and cash flows.

The company's business is significantly dependent on the company's distribution network and a majority of its revenue from operations is generated from the distributors from the south of India (representing 72.41% of our total distributors as of March 31, 2025). An inability to expand or effectively manage the company's distributor network, or any disruptions in the company's distribution network may have an adverse effect on its business, results of operations, financial condition and cash flows.

The company has substantial indebtedness which requires significant cash flows to service and limits the company's ability to operate freely. An inability to obtain further financing or to comply with repayment and other covenants in the company's financing agreements could adversely affect its business, results of operations, financial condition and cash flows. Further, one of its trademarks "Milky Mist " has been hypothecated as security for financing arrangements availed from certain lenders. Enforcement of such security by lenders in the event of default may have an adverse effect on the company's brand image, reputation and financial results.

The company's business requires working capital. Any failures in arranging adequate working capital for the company's operations may adversely affect its business, results of operations, cash flows and financial condition.

The company has not entered into definitive arrangements to utilize certain portions of the Net Proceeds of the Offer and the costs to be incurred in relation to such Objects are based on the quotations received from the vendors or estimates of the management. In the event of any delay in placing the orders, or in the event the vendors are not able to provide the equipment or services in a timely manner, or at all, it may result in time and cost over-runs and the company's business, prospects and results of operations may be adversely affected.

The value added dairy products industry is competitive and the company's inability to compete effectively may adversely affect its business, results of operations, financial condition and cash flows.