MV Electrosystems Limited IPO

The company's existing assembling cum manufacturing facility, Research, Design & Development Centre and the location where existing cable protection & interconnected products facility is proposed to be shifted, all are situated in the state of Haryana. Concentration of all the facilities in the state of Haryana, India, may expose us to regional risks that could adversely affect its business, results of operations, financial condition, and cash flows.

The company in the process of shifting operations for existing cable protection & interconnected products facility from Village Baghola, Palwal, Haryana ("Unit 1"), where it is presently situated, to Nangla Bhiku, Pawal, Haryana ("Unit 2") and installing new machinery for 3-Phase Propulsion Equipment, and any delays, cost overruns or execution failures may adversely affect its business and financial condition.

The company's revenue from operations have not been steady in the past and had been fluctuating and we may not be able to sustain growth in line with its current executable order book and current approval from CLW, Indian Railways. The company's inability to scale business in a timely manner within budget estimates, the quality of its product, services during maintenance contract could adversely affect the company's business, results of operations, financial condition and cash flows.

Any delay or failures in obtaining, renewing or maintaining statutory and regulatory approvals, or non-compliance with applicable laws, could adversely affect its business and operations. Further, the company has not received registration under the Contract Labour (Regulation and Abolition) Act, 1970 ("Contract Labour Act") and accordingly the company may be subject to regulatory action by the governmental authorities, which could adversely affect its business and operations.

The Company has a high working capital requirement and working capital projections made by the Company are based on its management's assumptions. The company may require alternate funding in Financial Year ending March 31, 2026 and March 31, 2027 post utilization of the Net Proceeds and if the Company is unable to raise sufficient working capital, the operations of the Company will be adversely affected.

The determination of the Price Band and Issue Price is based on various factors and assumptions and the Issue Price may not be indicative of the Market Price of the Equity Shares after the Issue. Further, there are no listed companies that is of similar size of its operations and also undertake the production of propulsion equipment and therefore qualitative or quantitative peer comparison cannot be undertaken.

Certain Equity Shares have been issued by our Company and transferred by its Promoter and Promoter Group shareholders in the secondary sale (as detailed below) during the preceding one year at prices (as proportionately adjusted for the split of face value of Equity Shares of Rs. 10 each to Rs. 5 each) that may be lower than the Issue Price.

There have been certain discrepancies in the past in relation to statutory compliances or filings required to be made by us, as well as there are certain other non-compliances / delays by the Company. Consequently, we may be subject to regulatory actions and penalties for any such non-compliance and its business, financial condition and reputation may be adversely affected.

In one instance in the past, our Company has returned raw materials / components imported by the company back to the Indian subsidiary of the supplier without giving intimation or obtaining prior approval from the Reserve Bank of India under the provisions of the Foreign Exchange Management Act, 1999 and the applicable rules and regulations issued thereunder. Imposition of penalty for not obtaining such approval may have an adverse effect on its results of operations, financial condition and cash flows.

The company is undertaking research, design & development activities to develop newer power electronics equipment required in Indian Railways and require significant expenditure and capital outlay, which may not yield the intended results in a timely manner or at all, and adversely affect its financial condition and results of operations.