Shri Hare-Krishna Sponge Iron Ltd IPO

The viability of its business operations for the Steel Division is dependent on cost of power and fuel, any volatility in energy prices may result into financial stress on the viability of the Steel operations which may lead to temporary shutdown of the plant, which had an affect its revenue and financial strength in the past and could effect the future too.

Substantial portion of its revenues has been dependent upon few customers, with which the company does not have any firm commitments. The loss of any one or more of its major customer would have a material adverse effect on its business, cash flows, results of operations and financial condition.

In the past, the Company contravened certain provisions of the SEBI Act and Regulations, for which SEBI imposed a penalty amounting to Rs. 2,40,000/- on the Company. This penalty was imposed under Section 15HA of the SEBI Act, 1992, for alleged violations in relation to trading activities in the Stock Options Segment of the Bombay Stock Exchange (BSE) during the period from April 1, 2014, to September 30, 2015.

The company significantly depends upon few of the raw material suppliers for manufacturing of sponge iron. Volatility in the supply and pricing of its raw materials may have an adverse effect on its business, financial condition and results of operations.

Its business operations are majorly concentrated in certain geographical regions and any adverse developments affecting its operations in these regions could have a significant impact on its revenue and results of operations.

The Company is yet to place orders for the some of the Plant & Machinery for the setup of captive power plant. Any delay in placing orders or procurement of such machinery may delay the schedule of implementation and possibly increase the cost of commencing operations.

Majority of its revenue is dependent on single business segment i.e. Sponge Iron. An inability to anticipate or adapt to evolving upgradation of products or inability to ensure product quality or reduction in the demand of such products may adversely impact its revenue from operations and growth prospects.

There have been certain instances of non-compliances/ discrepancies, including with respect to certain secretarial/ regulatory filings for corporate actions taken by the Company in the past. Consequently, its may be subject to regulatory actions and penalties for any such non-compliance/ discrepancies and its business, financial position and reputation may be adversely affected.

The company does not own the Registered Office and Manufacturing Unit from which its carry out the company business activities. In case of dispute in relation to use of the said premise, its business and results of operations can be adversely affected.

The company requires certain approvals, licenses, registrations and permits to operate its business, and failures to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operate its business may adversely affect its operations and financial conditions.