Apsis Aerocom Ltd IPO

The company Statutory Auditors have included an Emphasis of Matter in their audit report for Fiscal 2025, which may be viewed adversely by investors.

The Company, its Directors and its Promoters are party to certain litigation and claims. These legal proceedings are pending at different levels of adjudication before various forums and regulatory authorities. Any adverse decision may make it liable to liabilities/penalties and may adversely affect its reputation, business and financial status.

The company is highly dependent on certain key customers for a substantial portion of its revenues. Loss of relationship with any of these customers may have a material adverse effect on the company profitability and results of operations.

Failures to adequately address customer grievances may result in revenue loss and reputational damage.

The company has hypothecated the company major machines in favour of lenders may adversely impact its business operations and financial condition.

Its requires certain approvals and licenses in the ordinary course of business and the failures to successfully obtain/renew such registrations would adversely affect the company operations, results of operations and financial condition.

The company has had negative cash flows from Operating, investing and financing activities in the past in some of the recent years.

The company Statutory Auditors have included an Emphasis of Matter in their audit report for Fiscal 2025, which may be viewed adversely by investors

The company Promoters does not have formal education beyond senior secondary level, and investors should not place reliance on formal qualifications as assurance of managerial ability.

The Company does not have duly registered deeds of incorporation and amendment of the lease agreement for its immovable properties

If the company customers reduce or discontinue outsourcing precision manufacturing, or shift to in-house production or alternate suppliers, its sales and growth prospects may be adversely affected.

The company is subject to strict quality control requirements and any failure by it to comply with quality standards may lead to cancellation of existing and future orders and product recalls, which could adversely affect its business, financial condition and results of operations.

Any increase in the cost or shortage in the supply of raw materials, including volatility in the pricing and availability of aerospace-grade metals and alloys, may adversely affect its cost structure, production timelines, and financial performance.

Instances of non-compliance with regulatory requirements and clerical errors in statutory filings could subject it to regulatory action and penalties.

Any lapses in corporate governance or regulatory compliance under the Companies Act and SEBI regulations may attract penalties, regulatory scrutiny, and could adversely affect its reputation and proposed listing.

Its may be unable to sufficiently obtain, maintain, protect, or enforce the company intellectual property and other proprietary rights.

The company promoters, directors, key managerial personnel, or senior management of the issuer, are interested in its, other than reimbursement of expenses incurred or normal remuneration or benefits.

The company business and profitability are substantially dependent on the availability and cost of its raw materials, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact the company business, results of operations and financial condition.

The company is dependents on its Promoters, Key Managerial Personnel and Senior Management for the continued success of the company business through their continuing services and strategic guidance and support.

The company manufacturing facilities are critical to its business. Any disruption in the continuous operations of the company manufacturing facilities would have a material adverse effect on its business, results of operations and financial condition.

The company has unsecured loans including loans from, which may be recalled at any time. Any recall of such loans may have an adverse effect on its business, prospects, financial condition and results of operations.

Its inability to meet the company obligations under its debt financing arrangements could adversely affect the company business, results of operations and cash flows. Financing agreements includes certain conditions and restrictive covenants. This may limit its ability to pursue business and limit flexibility in planning for, or reacting to, changes in the company business or industry.

Dependence on unsecured loans from promoters without formally executed agreements may adversely affect its financial flexibility and liquidity.

The company credit facilities are secured by Promoters` personal guarantees and their revocation could adversely affect its financial position.

The temporary omission of "defence" from its MoA while the company continued servicing defence customers may invite regulatory or investor scrutiny regarding the scope of the company authorised objects.

The average cost of acquisition of Equity Shares by its Promoters could be lower than the issue price.

The company has contingent liability.

The company is yet to place orders for the machinery proposed to be purchased from the Net Proceeds for the expansion of its manufacturing capacity, which may lead to delays in project implementation.

The company has entered into and may continue to enter into related party transactions, which may involve conflicts of interest.

The company business works on a longer gestation period wherein, there is considerable time gap between the receipt of order and the payment, thereby, affecting its working capital requirements and profitability of the business.

If the company is unable to anticipate, identify, understand and respond timely to rapidly evolving technological and market trends to meet its customers` demands and to adapt to major changes and shifts in the aerospace, energy and defence markets, the company business may be materially adversely affected.

The company inability to successfully implement some or all its business strategies in a timely manner or at all could have an adverse effect on the company business. Further, its failures to manage growth effectively may adversely impact the company business, results of operations and financial condition.

The company does not have firm commitment agreements with the company customers. If its customers choose not to source their requirements from it, the company business and results of operations may be adversely affected.

Information relating to the installed manufacturing capacity, actual production and capacity utilization of its manufacturing facilities included in this Draft Red Herring Prospectus are based on several assumptions and estimates and actual future results may differ.

Objects of the Fresh Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of its Net Proceeds as disclosed in this Draft Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

The company is subject to counterparty credit risk and any delay in receipt or non-receipt of payments may adversely impact its financial condition and results of operations.

The company insurance cover may not be adequate or its may incur uninsured losses or losses in excess of the company insurance coverage.

The company employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements.

Its may be subject to industrial unrest, slowdowns and increased wage costs, which may adversely affect the company business and results of operations.

The company need to maintain sufficient inventory levels to meet customer expectations at all times. The company inability to maintain appropriate levels of inventory to meet the demands of its customers may have an adverse effect on the company results of operations and financial condition.

The company depends on the skills and experience of its Promoters, Key Managerial Personnel, Senior Management and employees with technical expertise for the company business and future growth.

The company 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 the company financing arrangements.

The company Promoters will continue to exercise significant influence over it and may cause it to take actions that are not in the best interest of its other shareholders.

The Company as well as its customers operate in a highly competitive industry. Failures to compete effectively may have an adverse impact on the company business, financial condition, results of operations and prospects.

The company is dependents on third party transportation and logistics providers. Any disruptions in logistics and transportation could adversely affect its business, financial condition and results of operations.

Its has significant power, water and fuel requirements and any disruption to power or water sources could increase the company production costs and adversely affect its results of operations.

There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

Dependence on a limited number of customers and suppliers may adversely affect its business and financial performance.

The company`s business and profitability are substantially dependent on the availability and cost of the company`s raw materials, and any disruption to the timely and adequate supply of raw materials, or volatility in the prices of raw materials may adversely impact its business, results of operations and financial condition.

Failures to adequately address customer grievances may result in revenue loss and reputational damage.

The company has hypothecated our major machines in favour of lenders may adversely impact its business operations and financial condition.

A significant portion of the company`s manufacturing operations and revenue is concentrated in the States of Karnataka and Telangana, exposing the company to geographic concentration risks.

The company requires certain approvals and licenses in the ordinary course of business and the failures to successfully obtain/renew such registrations would adversely affect its operations, results of operations and financial condition.

The company has had negative cash flows from Operating, investing and financing activities in the past in some of the recent years.

The company`s Statutory Auditors have included an Emphasis of Matter in their audit report for September 30, 2025, which may be viewed adversely by investors

The temporary omission of "defence" from its MoA while we continued servicing defence customers may invite regulatory or investor scrutiny regarding the scope of the company`s authorised objects.

Dependence on third-party job workers for certain critical manufacturing processes

If the company`s customers reduce or discontinue outsourcing precision manufacturing, or shift to in-house production or alternate suppliers, the company`s sales and growth prospects may be adversely affected.

The company is subject to strict quality control requirements and any failures by the company to comply with quality standards may lead to cancellation of existing and future orders and product recalls, which could adversely affect its business, financial condition and results of operations.

Discrepancies in Quarterly Statements of Current Assets Submitted to Lenders May Expose the Company to Regulatory, Contractual and Reputational Risks.

Instances of non-compliance with regulatory requirements and clerical errors in statutory filings could subject the company to regulatory action and penalties.

There have been certain instances of delays in payment of statutory dues by the company in the past. Any delay in payment of statutory dues by us in future, may result in the imposition of penalties and in turn may have an adverse effect on the company`s business, financial condition, results of operation and cash flows.

The Company, its Directors and its Promoters are party to certain litigation and claims. These legal proceedings are pending at different levels of adjudication before various forums and regulatory authorities. Any adverse decision may make the company liable to liabilities/penalties and may adversely affect its reputation, business and financial status.

The company may be unable to sufficiently obtain, maintain, protect, or enforce our intellectual property and other proprietary rights.

The company`s promoters, directors, key managerial personnel, or senior management, are interested in the Company, other than reimbursement of expenses incurred or normal remuneration or benefits.

The company is dependents on the company`s Promoters, Key Managerial Personnel and Senior Management for the continued success of the company`s business through their continuing services and strategic guidance and support.

The company`s manufacturing facilities are critical to its business. Any disruption in the continuous operations of the company`s manufacturing facilities would have a material adverse effect on the company`s business, results of operations and financial condition.

The company`s Promoters does not have formal education beyond senior secondary level, and investors should not place reliance on formal qualifications as assurance of managerial ability

The company operates entirely from rental/leased premises, including its registered office and manufacturing unit, and any termination, non-renewal, or dispute in respect of such leases, including unregistered amendments, could materially and adversely affect the company`s business.

The company has unsecured loans including loans from its directors, which may be recalled at any time. Any recall of such loans may have an adverse effect on the company`s business, prospects, financial condition and results of operations.

The company`s inability to meet its obligations under the company`s debt financing arrangements could adversely affect its business, results of operations and cash flows. The financing agreements includes certain conditions and restrictive covenants that may limit the company`s ability to pursue business and restrict its flexibility in planning for, or reacting to, changes in the company`s business or industry.

Dependence on unsecured loans from promoters without formally executed agreements may adversely affect its financial flexibility and liquidity.

The company`s credit facilities are secured by Promoters` personal guarantees and their revocation could adversely affect its financial position.

The average cost of acquisition of Equity Shares by the company`s Promoters could be lower than the issue price.

The company has contingent liabilities and commitments that may adversely affect its financial condition and results of operations.

The company is yet to place orders for the machinery proposed to be purchased from the Net Proceeds for the expansion of the company`s manufacturing capacity, which may lead to delays in project implementation.

The company has entered into and may continue to enter into related party transactions, which may involve conflicts of interest.

The company`s business works on a longer gestation period wherein, there is considerable time gap between the receipt of order and the payment, thereby, affecting its working capital requirements and profitability of the business

If the company is unable to anticipate, identify, understand and respond timely to rapidly evolving technological and market trends to meet its customers` demands and to adapt to major changes and shifts in the aerospace, energy and defence markets, the company`s business may be materially adversely affected.

The company`s inability to successfully implement some or all its business strategies in a timely manner or at all could have an adverse effect on the company`s business. Further, the company`s failures to manage growth effectively may adversely impact its business, results of operations and financial condition.

The company does not have firm commitment agreements with its customers. If the company`scustomers choose not to source their requirements from the company, the company`s business and results of operations may be adversely affected.

Information relating to the installed manufacturing capacity, actual production and capacity utilization of the company`s manufacturing facilities included in this Red Herring Prospectus are based on several assumptions and estimates and actual future results may differ.

Objects of the Fresh Issue for which the funds are being raised have not been appraised by any bank or financial institutions. Any variation in the utilization of the company`s Net Proceeds as disclosed in this Red Herring Prospectus would be subject to certain compliance requirements, including prior Shareholders` approval.

The company is subject to counterparty credit risk and any delay in receipt or non-receipt of payments may adversely impact its financial condition and results of operations.

The company`s insurance cover may not be adequate or the company may incur uninsured losses or losses in excess of the company`s insurance coverage.

The company`s employees may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements

The company may be subject to industrial unrest, slowdowns and increased wage costs, which may adversely affect its business and results of operations.

The company needs to maintain sufficient inventory levels to meet customer expectations at all times.The company`s inability to maintain appropriate levels of inventory to meet the demands of our customers may have an adverse effect on the company`s results of operations and financial condition.

The company depends on the skills and experience of the company`s Promoters, Key Managerial Personnel, Senior Management and employees with technical expertise for its business and future growth.

The 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 the company`s financing arrangements.

The company`s Promoters will continue to exercise significant influence over the company and may cause us to take actions that are not in the best interest of the company`s other shareholders.

The Company operates in a competitive industry. Failures to compete effectively may have an adverse impact on the company`s business, financial condition, results of operations and prospects.

The company is dependents on third party transportation and logistics providers. Any disruptions in logistics and transportation could adversely affect its business, financial condition and results of operations.

The company has significant power, water and fuel requirements and any disruption to power or water sources could increase its production costs and adversely affect the company`s results of operations.

There is no monitoring agency appointed by the Company to monitor the utilization of the Issue proceeds.

The company`s profit margins have fluctuated in the past and may continue to fluctuate in the future, which could adversely affect its financial performance and results of operations.

Withdrawal or suspension of the company`s AS9100D and ISO 9001:2015 aerospace quality management certification could adversely affect its eligibility to undertake the company`s business operations or commitments in aerospace and defence sector.

Dependence on continued compliance with defence sector procurement policies and potential changes in indigenous manufacturing requirements and offset obligations.

The company`s products may be liable to risks of recall in case of any defect in the manufacturing of the company`s products exposing the company to negative financial implications associated with rectifying such a defect.

Technology Obsolescence due to rapid advancements in Additive Manufacturing and Industry 4.0 Technologies

Changes in GST rates, customs duties on imported aerospace-grade materials, or withdrawal of tax-linked incentives may increase its costs, although current exposure is limited.

Non-fulfilment of export obligations under the EPCG Scheme may result in repayment of duty benefits, interest liabilities and potential invocation of bank guarantees.

The company will be subject to stringent disclosure, compliance, and insider trading regulations, and any failures to adhere to these requirements may attract regulatory action and adversely affect its reputation.

Extended production cycles and customer payment terms may impact working capital.

The company is subject to risks arising from interest rate fluctuations which could adversely affect its results of operations, planned expenditures and cash flows.

The company`s future capacity expansion plans are based on certain assumptions and estimates regarding demand, and any deviation from these projections may affect the timing, scale, or necessity of the proposed expansion.

The Company may encounter execution and deployment risks relating to the proposed investment of Rs.2,702.01 lakhs in machinery procurement without confirmed customer orders.

Debt covenant compliance risks and potential breach of financial ratios required by lenders, which may result in accelerated repayment demands

Quantum and adequacy of the company`s insurance coverage, including absence of business interruption insurance and gaps in product liability insurance, may expose the company to potential financial losses

Cybersecurity vulnerabilities in the company`s CAD/CAM design systems may lead to data breaches or loss of customer proprietary information.

Failures, disruption or cyber-attack on the company`s information technology ("IT") and/or enterprise resource planning systems may adversely affect its business, financial condition, results of operations and future prospects.

Impact of geopolitical tensions, including india-china relations, on the global supply of rare earth minerals and critical aerospace-grade materials.

Global supply chain disruptions arising from geopolitical tensions, pandemic impacts, and evolving nearshoring trends may affect material availability and costs.

Concentration of the company`s manufacturing operations at a single location increases its exposure to localised operational and environmental risks.