Sonaselection India Limited IPO

A major portion of its revenue from operations is dependent upon a limited number of customers, the company's revenue from its top ten customers is Rs.352.35 million, Rs.1,199.85 million, Rs.582.51 million and Rs.425.77 million constituting 33.80%, 37.98%, 48.15% and 45.34% of the company's overall revenue from operations for the Three Months Period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively. Loss of any of these customers or loss of revenue from any of these customers could have a material adverse effect on its business, financial condition, results of operations and cash flows.

The company depends on a certain limited set of suppliers for the supply of primary raw materials. Tthe company's procurement of raw materials from its top ten suppliers is Rs.616.49 million, Rs.2,124.48 million, Rs.407.37 million and Rs.409.08 million constituting 68.92%, 80.74%, 77.52% and 74.33% of the company's overall procurement for the Three Months Period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively. Any loss of suppliers or interruptions in the timely delivery of supplies and services could have an adverse impact on its business, financial condition, cash flows and results of operations.

The company's Manufacturing Facility and Registered Office are located in Rajasthan, and a significant portion of its revenue amounting to Rs.369.72 million, Rs.1,594.57 million, Rs.1,153.06 million and Rs.911.10 million constituting 35.47%, 50.47%, 95.31% and 97.02% of the company's total revenue from operations for the Three Months Period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023 respectively is also derived from this state. Further, the company's procurement from Rajasthan amounted to Rs.858.13 million, Rs.2587.97 million, Rs.505.83 million and Rs.457.88 million constituting 95.93%, 98.36%, 96.26% and 83.19% of purchases for the Three Months Period ended June 30, 2025, Fiscal 2025, Fiscal 2024 and Fiscal 2023. As a result, we are exposed to geographic concentration risks that may adversely affect its operations, financial condition, and results of operations.

Any slowdown or shutdown of its manufacturing operations at the company's manufacturing facility could have an adverse effect on its business, financial condition and results of operations.

The company is subject to stringent quality requirements from its buyers. Any failures to meet prescribed quality specifications may result in product rejections, loss of customer confidence, and reputational damage, which could adversely affect the company's business and results of operations.

Under-utilisation of its manufacturing capacity and an inability to effectively utilize the company's manufacturing capacity could have an adverse effect on its business, future prospects and future financial performance.

There are outstanding litigations involving the Company, Subsidiary, Promoters, Directors, KMPs and SMPs. An adverse outcome in any of these proceedings may affect its reputation and standing and impact the company's future business and could have a material adverse effect on its business, financial condition, cash flows and results of operations.

the company has experienced negative cash flows in the past, and sustained or significant negative cash flows may adversely affect its business, financial condition and growth prospects.

Some of the members of our Promoter Group have not consented to the inclusion of, nor have they provided, information or any confirmations or undertakings pertaining to themselves or the entities in which they hold interest, which are required to be disclosed in relation to Promoter Group under the SEBI ICDR Regulations in this Draft Red Herring Prospectus. The disclosures relating to these members of the Promoter Group have been included in this Draft Red Herring Prospectus based on information available in public domain. Accordingly, the company cannot assure you that the disclosures relating to such members of its Promoter Group are accurate, complete, or updated. Further, details in relation to Connected Entities which may qualify as a member of the company's Promoter Group have not been disclosed in this Draft Red Herring Prospectus.

The company has significant working capital requirements and its inability to meet such working capital requirements may have an adverse effect on the company's results of operations.