Sael Industries Limited IPO

The company has a history of net losses from continuing operations and negative net worth. In particular, the company had loss for the period/years from continuing operations of Rs.(583.11) million, Rs.(2,809.48) million, Rs.(2,671.41) million and Rs.(846.14) million for the three months ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively. The company may continue to incur losses and not be able to achieve profitability in the future, and its net worth may continue to be negative, which may have an adverse effect on our cash flows and financial conditions.

The company's off-takers may not be able to or be unwilling to fulfil their contractual obligations as a result of their poor financial health or for other reasons, which may adversely affect its business, financial condition, results of operations, cash flows and prospects. Further, any delay in, or failures to, execute a power purchase agreement after the receipt of a letter of award may hinder the progress of such projects.

The company depends on certain key off-takers for a significant portion of its revenues (the company's top 5 off-takers contributed to 94.63%, 89.81%, 93.12% and 89.41% of its revenue from operations in the three months ended June 30, 2025 and Fiscals 2025, 2024 and 2023, respectively). Any inability to retain the company's key off-takers or decrease in revenues from any of its key off-takers could negatively affect the company's business, results of operations, financial condition and cash flows.

The company faces risks and uncertainties when developing solar and agri waste-to-energy projects. If the company cannot convert any project into an operational project,the company's business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected

The company's power purchase agreements expose the company to several risks including those associated with cost overruns and delays. In the event the company is not successful in fulfilling obligations under its power purchase agreements, the company's business, results of operations and financial condition may be adversely impacted.

Certain of the company's power purchase agreements contain provisions which allow for the tariffs to be revised. In addition, customers may seek to, and certain states or off-takers have sought to, revise the terms of its power purchase agreements, including by revising the tariff and to curtail the generation of renewable energy.

The company has substantial indebtedness and liabilities and are subject to restrictive and other covenants under its debt financing arrangements. If the company is unable to satisfy our debt and liabilities or refinance its indebtedness on commercially reasonable terms, the company's business, financial condition and results of operations could be materially and adversely affected.

If the energy production by, or availability of, the company's projects is less than expected, the company's projects may not be able to satisfy minimum production or availability obligations with its counterparties, which could result in a material adverse effect on the company's business, financial condition, cash flows and results of operations.

The company is requireds to provide bid bond guarantees at the time of bidding, connectivity bank guarantees in relation to the company's grid permits and performance bank guarantees under its power purchase agreements. Any default, contractual or regulatory, on the company's part may result in invocation of its guarantee claims and payment of liquidated damages which could have an adverse effect on the company's business, cash flows, financial condition and results of operations. The company has also provided corporate guarantees for certain debt of its Subsidiaries, which, if invoked, could lead to a material adverse effect on the company's business, cash flows, financial condition and results of operations.

The success of the company's agri waste-to-energy projects depends on the steady supply of fuel feedstock, which is subject to various uncertainties and risks, including the risk of procuring its fuel feedstock from a single supplier.