Supreet Chemicals Limited IPO

The company's operations involve certain inherent risks arising from the use, storage, and transportation of hazardous substances, and engagement in complex chemistries and multi-step unit operations and processes, which may expose the company to the risk of industrial accidents that could result in personal injury, property damage, environmental harm, regulatory action, and adverse impact on the company's business, financial condition, results of operations, and prospects.

The company's business is dependent on our Manufacturing Facilities for its operations, all of which including the company's warehouses and its Proposed Greenfield Project are located in Vapi, Gujarat. Any slowdown or shutdown in the company's Manufacturing Facilities and its inability to expand to new geographies or any significant social, political, economic, or seasonal disruptions, as well as natural calamities or civil disturbances in Vapi, Gujarat could have an adverse effect on the company's business, results of operations, financial condition and cash flows.

The company is reliant on certain end use industries including textiles, pharmaceuticals, performance chemicals, personal care and agro-chemicals which collectively contributed to 71.87%, 64.80% and 55.75% of its Revenue from Operations for Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Any adverse developments affecting these key end-use industries could have an adverse effect on the company's business, results of operations, financial condition and cash flows.

The company's top 10 customers contributed to a significant portion of its Revenue from Operations and 56.25%, 54.06% and 60.31% of the company's Revenue from Operations in Fiscal 2025, Fiscal 2024 and Fiscal 2023 was derived from the company's top 10 customers. Further, the company relies on purchase orders and do not have long term contracts with any of these customers. If one or more of such customers choose not to source their requirements from the company or to terminate its business relationship or the company's failures to adhere to the terms of purchase orders entered into with its customers may have an adverse effect on the company's business, financial conditions and results of operations.

The company's business and operations are reliant on the timely and sufficient procurement of key raw materials. Any restriction, delay or disruption to the timely and adequate procurement of raw materials, or volatility in the prices of raw materials on account of increase in shipment costs or rising geopolitical tensions or trade restrictions, could have an adverse impact on its business, financial condition, and results of operations. Further, improper storage, processing and handling of the company's raw materials, work in progress and finished goods could damage its inventories and adversely affect the company's business and operations.

The company's top 10 suppliers contributed to a significant portion of its Raw Material Cost and 64.79%, 49.43% and 47.96% of the company's Raw Material Cost in Fiscal 2025, Fiscal 2024 and Fiscal 2023 was derived from our top 10 suppliers. The company does not have firm commitments for supply or exclusive arrangements with any of our third-party suppliers and are required to pay advances from time to time. Any disruption or change in the company's business relationship, owing to a supplier's decision to cease or reduce supply, alter terms, or the company's inability to comply with their requirements could adversely affect its business, financial condition, and results of operations.

The company's R&D efforts are critical for product development and portfolio expansion which is crucial for its competitiveness and future growth, and any failures to advance these efforts in a timely and cost-effective manner could adversely affect the company's business, financial condition, cash flows, and results of operations. Further, the company's investments in new products may not be successful and may be less profitable or may be loss-making.

The company derives a significant portion of its Revenue from Operations from the company's top 10 products and its top 10 products contributed to 52.73%, 42.81% and 43.83% of the company's Revenue from Operations in Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. If the company's products do not perform as expected or if competing products become available and gain wider market acceptance, the company's business, results of operations, financial condition and cash flows may be adversely affected.

The company's Revenue from Exports constituted 25.54%, 29.80% and 26.22% of its Revenue from Operations, for Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Any adverse changes in export markets or export regulations may materially and adversely affect its business, financial condition, and results of operations. Further, the company's inability to diversify into new export markets may affect its business and results of operations.

The company's proposed expansion plans which involve setting up of a new greenfield manufacturing facility in Vapi, Gujarat ("Proposed Greenfield Project") is subject to the risk of unanticipated delays in implementation and cost overruns.