Sael Industries Limited IPO

We have a history of net losses from continuing operations and negative net worth. In particular, we 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. We may continue to incur losses and not be able to achieve profitability in the future, and our net worth may continue to be negative, which may have an adverse effect on our cash flows and financial conditions.

Our 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 our business, financial condition, results of operations, cash flows and prospects. Further, any delay in, or failure to, execute a power purchase agreement after the receipt of a letter of award may hinder the progress of such projects.

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

We face risks and uncertainties when developing solar and agri waste-to-energy projects. If we cannot convert any project into an operational project, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected

Our power purchase agreements expose us to several risks including those associated with cost overruns and delays. In the event we are not successful in fulfilling obligations under our power purchase agreements, our business, results of operations and financial condition may be adversely impacted.

Certain of our 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 our power purchase agreements, including by revising the tariff and to curtail the generation of renewable energy.

We have substantial indebtedness and liabilities and are subject to restrictive and other covenants under our debt financing arrangements. If we are unable to satisfy our debt and liabilities or refinance our indebtedness on commercially reasonable terms, our business, financial condition and results of operations could be materially and adversely affected.

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

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

The success of our 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 our fuel feedstock from a single supplier.