Neolite ZKW Lightings Limited IPO

The company's business is substantially dependent on the performance of the automotive sector, as the company derives a significant portion of its revenue from the supply of automotive lighting products and components, and related services to automotive industry, accounting for 98.78%, 97.81%, 97.49% and 97.34% of its Revenue from Operations for the three months period ended June 30, 2025, and the Financial Years ended March 31, 2025, March 31, 2024 and March 31, 2023, respectively. Any adverse changes in the conditions affecting this sector may adversely impact the company's business, results of operations and financial condition.

The company derives a significant portion of its Revenue from Operations from the company's top 10 customers (which accounted for 82.50%, 72.11 %, 68.07% and 67.82% of its Revenue from Operations for three months period ended June 30, 2025, and the Financial Years ended March 31, 2025, March 31, 2024 and March 31, 2023, respectively) and any loss of such customers, significant reduction in their purchases, failures to maintain the company's relationships with them, or any adverse change in their financial condition may have a significant adverse impact on its business, results of operations, financial condition and cash flows.

The company's business operations are dependent on the performance and continued financial stability of its OEM customers, which contributed 91.07%, 87.41%, 83.67%, and 84.78% of the company's Revenue from Operations for the three months period ended June 30, 2025, and the Financial Years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively. Any failures in the performance or financial distress faced by any such OEM customers could have a material impact on the company's business, results of operations and financial condition.

The company supply the company's products to most of its customers based on purchase orders that specify pricing, quality standards, and delivery schedules. Any failures to meet these purchase order requirements, including delays in delivery, quality issues, or any reduction, postponement or cancellation of purchase orders, could adversely affect the company's business, results of operations, cash flows and financial condition.

A considerable portion of the company's Revenue from Operations is derived from export markets and majority of its export revenue is derived from customers based in the CIS countries, which contributed 94.18%, 91.89%, 81.00% and 39.07% of the company's revenue from export operations for the three months period ended June 30, 2025, and the Financial Years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively. Any adverse developments in these countries could materially and adversely affect its business, results of operations, financial condition and cash flows.

The company rely on third-party suppliers for raw materials and components, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact its business, results of operations and financial condition.

The company intend to undertake capital expenditure of Rs 1,525.10 million and Rs. 790.79 million from the Net Proceeds for setting up Proposed Project at Kancheepuram, Tamil Nadu, and for the Upgradation of our existing Unit 1 Manufacturing Facility, respectively, and any delays, cost overruns or implementation challenges in relation thereto could adversely affect its business, financial condition and growth prospects.

The company's Unit 1 Manufacturing Facility and its Project Land are located within industrial development corporation. If the company is unable to comply with conditions of use of such land or otherwise renew existing leases for such manufacturing facilities, the company may have to relocate the company's operations, which may have an adverse impact on its business, financial condition and operations.

Under-utilisation of its manufacturing capacities, the company's inability to effectively utilise expanded capacities, or manage early obsolescence of the company's manufacturing equipment, may adversely affect its business, results of operations, cash flows and future prospects.

The company's funding requirements and proposed deployment of the Net Proceeds of the Offer have not been appraised by a bank or a financial institution and if there are any delays or cost overruns, the company's business, financial condition and results of operations may be adversely affected.