Shanti Spintex IPO

Capability to manufacture diverse range of denim fabrics through in-house weaving unit.\r\nStringent quality control mechanism ensuring standardized product quality.\r\nSynergy of young and experienced management team with a committed employee base.

Its business is vulnerable to variations in demand of denim-based apparels and changes in consumer preferences, which could have an adverse effect on its business, results of operations and financial condition.\r\nSubstantial 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.\r\nThe company face competition, including from other large and established competitors, and its may fail to compete successfully against existing or new competitors, which may reduce the demand for the company Products which may lead to reduced prices, operating margins, profits and further result in decline in revenue.\r\nThe company is primarily dependent upon few key suppliers for procurement of raw materials. Any disruption in the supply of these raw materials or fluctuations in their prices could have a material adverse effect on its business operations and

financial conditions.\r\nThe company relies on outsourcing a certain proportion of its production processes and activities to third-parties, without exclusivity arrangements. Any inability to obtain sufficient quantities of processed material of the requisite quality in a timely manner and at acceptable prices, or a slowdown, shutdown or disruption in such third parties' operations and performance, could adversely affect its business, results of operations and financial condition.\r\nThe company requires certain approvals, licenses, registrations and permits to operate its business, and failure to obtain or renew them in a timely manner or maintain the statutory and regulatory permits and approvals required to operates its business may adversely affect the company operations and financial conditions.\r\nThe Company, Promoters and Directors are parties to certain tax proceedings. Any adverse decision in such proceedings may have a material adverse effect on its business, results of operations and financial condition.\r\nOne of its Promoter Group entity, namely CIL Nova Petrochemicals Limited, has in the past been restrained by SEBI from buying, selling, dealing or accessing the securities market for violation of the SEBI (Prohibition of Fraudulent and

Unfair Trade Practices relating to Securities Market) Regulations, 2003. In addition, one of its Promoter Group member, Mr. Shivkumar Omprakash Agarwal and Promoter group entity, Shivalay Texo Fab. Pvt. Ltd. has been declared as defaulters by MCA for not filing Annual Returns and Balance Sheet.\r\nThe company has not complied with certain statutory provisions of the Companies Act, 2013. Such non-compliance may attract penalties against our Company which could impact the financial position of it to that extent.\r\nThe Company's logo is not registered as on date of this Draft Red Herring Prospectus. Its may be unable to adequately protect the company intellectual property. Furthermore, its may be subject to claims alleging breach of third party intellectual property rights which could have a material adverse effect on its business, results of operations and financial condition.\r\nAny failure in its quality control processes may have an adverse effect on the company business, results of operations and financial condition.\r\nThe company continued operations at its manufacturing facility is critical to the company business and any disruption, breakdown or failure of machinery, disruption to power sources or any temporary shutdown of its manufacturing facility, may have a material adverse effect on its business, results of operations, financial condition and cash flows.\r\nAny failure on its part to effectively manage the company inventory may result in an adverse effect on its business, revenue from manufacturing operations and financial condition.\r\nUnder-utilization of its manufacturing capacities and an inability to effectively utilize the company existing manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance.\r\nThe company insurance coverage may not be adequate to protect it against certain operating hazards and this may have a material adverse effect on its business.\r\nIf the company is not able to successfully manage its growth, its business and results of operations may be adversely affected.\r\nThe company is heavily dependent on ita Promoters and Key Managerial Personnel for the continued success of its business through their continuing services and strategic guidance and support.\r\nThe company have incurred indebtedness which exposes it to various risks which may have an adverse affect on its business and results of operations.\r\nThe company's business operations are majorly concentrated in a particular geographical region and any adverse developments affecting its operations in this region could have a significant impact on its revenue and results of operations.\r\nAdverse publicity regarding its products could negatively impact it.\r\nThe company have in the past entered into related party transactions and may continue to do so in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on the Company's

financial condition and results of operations.\r\nDependence upon third party transportation services for supply and transportation of its products are subject to various uncertainties and risks, and delays in delivery may result in rejection of products by customer.\r\nThe average cost of acquisition of Equity Shares by its Promoters could be lower than the Offer price.\r\nThe company has not received NOC from one of its lender for undertaking the initial public offer of equity shares.\r\nThe company operations are subject to high working capital requirements. its inability to maintain an optimal level of working capital required for its business may impact the company operations adversely.\r\nFailure to effectively manage labour or failure to ensure availability of sufficient labour could affect the business operations of the Company.\r\nThe company contingent liabilities as stated in its Restated Financial Statements could affect its financial condition.\r\nThe Promoters (including Promoter Group) and Directors hold 87.49% of the Equity Shares of the Company and are therefore interested in the Company's performance in addition to their remuneration and reimbursement of expenses.\r\nIts Promoters, Directors and Promoter Group members/entities have provided personal guarantees for loan facilities obtained by the Company, and any failure or default by the Company to repay such loans in accordance with the terms and conditions of the financing documents could trigger repayment obligations on them, which may impact their ability to effectively service their obligations as its Promoters/ Directors and thereby, impact the company business and operations.\r\nThe Company has unsecured loans which are repayable on demand. Any demand from lenders for repayment of such unsecured loans may adversely affect its cash flows.\r\nThe company Promoter Group Entities are engaged in similar line of business. Any conflict of interest in future may occur between the business of its promoter group entities and it which may adversely affect our business, prospects, results of operations and financial condition.\r\nThe company has not identified any alternate source of funding and hence any failure or delay on its part to mobilize the required resources or any shortfall in the Offer proceeds may delay the implementation schedule.\r\nThe Objects of the offer for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure as estimated by the management could result in execution delays or influence its profitability adversely.\r\nInformation relating to its production capacities and the historical capacity utilization of the company production facilities included in this Draft Red Herring Prospectus is based on certain assumptions and has been subjected to rounding off, and future production and capacity utilization may vary.\r\nFraud, theft, employee negligence or similar incidents may adversely affect its results of operations and financial condition.\r\nRelevant copies of educational qualification of one of our director is not traceable.\r\nThe company is subject to restrictive covenants under its credit facilities that limit the company operational flexibility.\r\nThe deployment of funds raised through this Offer shall not be subject to any Monitoring Agency and shall be purely dependent on the discretion of the management of the Company.\r\nThe company will continue to be controlled by its Promoters after the completion of the Offer.\r\nThe company's ability to pay dividends in the future will depend upon its future earnings, financial condition, cash flows, working capital requirements, capital expenditure and restrictive covenants in its financing arrangements.\r\nCertain key performance indicators for certain listed industry peers included in this Draft Red Herring Prospectus have been sourced from public sources and there is no assurance that such financial and other industry information is

complete.\r\nAny future issuance of Equity Shares may dilute your shareholdings, and sale of the Equity Shares by its major shareholders may adversely affect the trading price of the company Equity Shares.\r\nAny Penalty or demand raised by statutory authorities in future will affect its financial position of the Company.\r\nThe company cannot guarantee the accuracy or completeness of facts and other statistics with respect to India, the Indian economy and industry in which its operate contained in the Draft Red Herring Prospectus.\r\nCertain data mentioned in this Draft Red Herring Prospectus has not been independently verified.