Dev Accelerator Ltd IPO

Objects of the Offer

• Expansion into new and existing markets.

• Enhance our client offerings.

• Enhancing our asset procurement strategy.

• Leveraging the potential of Global Capability Centres.

• Our Service Offerings.

• Our network.

• Our Asset Procurement Strategy.

• Operations network and process.

• Our space owner portfolio.

• Our client base.

• Our client acquisition strategy and demand.

• We incurred a loss of Rs. 128.30 million during Fiscal 2023, and reported negative EPS. While we turned PAT positive in Fiscal 2024, we cannot assure you that we will sustain profitability going forward. Our inability to sustain profitability by generating higher revenues and managing expenses may have an adverse effect on our business, results of operations, cash flows and financial condition.

• We do not own the land and buildings at any of our Centers. Any defect in the title and ownership of the land and building where our Centers are located may result in our Centers being shut down, result in relocation costs for us and termination of our Client Agreement, which may adversely impact our results of operations and profitability.

• We acquired 43.69% of the paid-up equity share capital of Janak Urja Private Limited (JUPL), one of our Associates and Group Companies, in pursuance of our PropCo-OpCo model and if we fail to realise the financial benefit of such investments, it could have a material adverse effect on our business, financial condition, cash flows and results of operations. Further, we may fail to successfully make acquisitions or investments, and we may not be able to successfully integrate acquisitions or achieve the anticipated benefits from these acquisitions or investments that we make.

• Our success largely depends on our ability to identify the preferred buildings/ properties in preferred locations and sourcing such Centers at the right rate of rental and other commercial terms. We intend to allocate an aggregate of Rs.731.16 million of the Net Proceeds towards capital expenditure for fit-outs in the 4 (four) Proposed Centers, out of which we have not entered into any agreements for 2 (two) of the Proposed Centers. Any failure to do so will adversely affect our business, cash flows, results of operations and profitability.

• Our top 10 customers contributed to 38.58%, 37.18% and 37.93% of our revenue from operations and our top 20 customers contributed to 54.13%, 53.53% and 53.33% of our revenue from operations for the Fiscals 2025, 2024 and 2023, respectively. Any decrease in revenues or sales from any one of our key customers may adversely affect our business and results of operations.

• Our Managing Director is involved in a venture which is in the same line of business as that of our Company.

• A portion of our new clients originate from brokers. The percentage of seats sold / facilitated through brokers as a percentage of the new seats sold was 19.45% in Fiscal 2023, and 75.41% in Fiscal 2024 which reduced to 43.75% in Fiscal 2025. In the event brokers gain market share compared to our direct booking channels or our competitors are able to negotiate more favorable terms with such brokers, our business, cash flows and results of operations may be adversely affected.

• We have entered, and will continue to enter, into related party transactions which may turn out to be prejudicial to our interests. Further, our Promoter Directors and Key Managerial Personnel and members of our Senior Management have interests in us other than reimbursement of expenses incurred and normal remuneration or benefits.

• As of Fiscal 2025, Rs. 803.97 million of our revenue from operations from our flexible working spaces was derived from Centers located in Tier 2 cities with Ahmedabad, Gujarat accounting for Rs.482.84 million constituting 30.39% of our revenue from operations. Accordingly, a significant portion of our revenues from flexible working spaces are derived from Centers concentrated in few cities and any adverse developments affecting such Centers, cities or regions could have an adverse effect on our business, results of operations and financial condition.

• Our cash flows from operating activities have been fluctuating in the past. We have experienced negative cash flows from investing activities of Rs. 380.08 million, Rs.408.59 million and Rs. 240.60 million in Fiscals 2025, 2024 and 2023, respectively. Further, we also have negative cash flows from financing activities of Rs.529.22 million and Rs. 36.57 million in Fiscals 2025 and 2023, respectively, and may continue to do so in the future, which could adversely affect our business, prospects, financial condition, cash flows, and results of operations.

• Our business has grown rapidly, including experiencing growth in our Operational Centers, Operational seats and Operational Super Built-Up Area at a CAGR of 23.67%, 16.34% and 15.24%, respectively, between March 31, 2023 to March 31, 2025, primarily driven by our Company being in the early growth phase of its business lifecycle. As we continue to scale, there is no assurance that we will be able to achieve similar growth rates or manage this growth effectively. Our failure to do so may adversely impact our operations, financial performance, and future prospects.

• We derive a significant portion of our revenue from clients engaged in certain industries, particularly more than 55% of revenue from our operations is generated from clients in IT / ITES industry in each of the last three fiscals and a loss of, or a significant decrease in business from clients in these industries could adversely affect our business, results of operations, financial condition and cash flows.

• We face significant competitive pressures in our business. Our inability to compete effectively would be detrimental to our business and prospects for future growth.

• We had an attrition rate of 13.09%, 52.74% and 33.71% in Fiscals 2025, 2024 and 2023, respectively, for our permanent employees. Our operations are dependent on our ability to attract and retain qualified personnel, including our Key Managerial Personnel and Senior Management Personnel and any inability on our part to do so, could adversely affect our business, results of operations and financial condition.

• For our business, we rely heavily on our Promoters namely, Parth Naimeshbhai Shah and Rushit Shardulkumar Shah, who are the Whole-Time Directors and our Promoter, Umesh Satishkumar Uttamchandani who is the Managing Director. Our business performance may have an adverse effect by their departure or by our failure to recruit or keep them.

• We may not be able to attract new clients in sufficient numbers, under the managed office space segment, which contributed to 58.77%, 68.50% and 50.51% of our revenue from operations during Fiscals 2025, 2024 and 2023, respectively or continue to retain existing clients, a majority portion of whom enter into service agreements ("Client Agreements") with long-term commitments, or agree sufficient rates to sustain and increase our client base or at all.

• Our Promoters will continue to retain significant control in our Company after the Issue, which will allow them to exercise influence over us.

• We have substantial capital expenditure and working capital requirements and may require additional financing to meet those requirements, which could have a material adverse effect on our results of operations, cash flows and financial condition.

• Conflict of interest may arise out of common business objects between our Company and our Subsidiaries and Associates.

• We have certain contingent liabilities, which, if they materialize, may adversely affect our results of operations, financial condition and cash flows.

• Majority of our Centers operate under the straight lease model wherein the entire cost towards capital expenditure and fit-outs for the Centers is borne by us. We may also have to incur additional capital expenditure to attract new clients and retain existing clients, which may impact our cash flows and profitability.

• We intend to utilise up to Rs.731.16 million from the Net Proceeds towards capital expenditure for fit-outs in the Proposed Centers. We have shortlisted vendors and obtained quotations from them. However, we are yet to enter into definitive agreements with the vendors in relation to such capital expenditure requirements.

• We rely on our customer relationships to grow our business and generate revenues. Any negative customer experience may impact our ability to attract or retain clients and impact our growth and profitability.

• We have entered into long-term fixed cost leases, i.e., straight-lease for super built-up area of 479,579 sq. ft. covering total of 21 Centers across 9 cities and 6 states aggregating 55.74% of our total seats as of May 31, 2025, which may result in adverse impact in our liquidity, results of operations, cash flows and profitability.

• Our insurance coverage may not be adequate to protect us against all potential losses, which may have a material adverse effect on our business, financial condition, cash flows and results of operations.

• There have been instances of certain delays in payment of statutory dues by us in the past. Any such delays in the future may attract financial penalties from the respective government authorities and in turn may have a material adverse impact on our financial condition and cash flows.

• We have presented certain supplemental information of our performance and liquidity which is not prepared under or required under Ind AS, and reliance on such information may not provide an accurate or complete picture of our financial condition or results of operations.

• Majority of our Centers are located in the State of Gujarat, and any adverse developments affecting this region could have an adverse effect on our business, results of operations and financial condition.

• As we expand our business into new regions and markets, the sub-optimal performance of our new Centers could adversely affect our business, prospects, results of operations, financial condition and cash flows.

• Our inability to meet our obligations, including financial and other covenants under our debt financing arrangements could adversely affect our business, results of operations and financial condition.

• We have availed unsecured loans that may be recalled at any time.

• Our business and operations depend on the assistance of third-party vendors to fulfil tasks like providing services such as housekeeping, valet parking, security and for hiring of contract labour and any shortcomings in the services they offer could have an impact on our Company`s operations and image.

• Operational risks are inherent in our business as it includes rendering services at high quality standards at our Centers across multiple locations. A failure to manage such risks could have an adverse impact on our business, results of operations, cash flows and financial condition.

• We are exposed to risks associated with the development, construction and maintenance of the spaces we occupy.

• Our operations entail certain fixed expenses, and our inability to reduce such costs during periods of low demand for our solutions may have an adverse effect on our business, results of operations, cash flows and financial condition.

• Our Registered Office and Corporate Office are operated on leased premises and our inability to renew such lease agreement may adversely affect our business, results of operations and financial condition.

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

• We are subject to government regulations in the jurisdictions in which we operate. Any non-compliance with, or changes in, regulations applicable to us may adversely affect our business, results of operations, cash flows and financial condition.

• The classification of cities into Tier 1 and Tier 2 categories is based on industry standard parameters, such as population size, economic output, real estate activity and infrastructure development. However, these definitions may not align with formal government classifications, which may use different criteria, such as HRA percentages or population size. Readers are advised to consider these distinctions while interpreting the city classifications.

• We are exposed to risk of client`s defaults, which may adversely impact our cash flows and financial performance.

• Our inability to protect or use our intellectual property rights may adversely affect our business. We may also unintentionally infringe upon the intellectual property rights of others, any misappropriation of which could harm our competitive position.

• In the event we fail to obtain, maintain or renew our statutory and regulatory licenses, permits and approvals required to operate our business, including due to any default on the part of the owners of the properties we lease and manage, our business, cash flows and results of operations may be adversely affected.

• Our business may suffer a significant setback if our third-party vendors are unable to secure, uphold, or renew the licenses, registrations, and approvals necessary to conduct their operations under the statutory and regulatory requirements.

• There are outstanding legal proceedings involving our Company and one of our Promoters. Any adverse decision in such proceedings may adversely affect our business, financial condition, and results of operations.

• If we fail to maintain an effective system of internal controls, we may not be able to successfully manage, or accurately report, our financial risks. Despite our internal control systems, we may be exposed to operational risks, including fraud, petty theft and embezzlement, which may adversely affect our reputation, business, financial condition, results of operations and cash flows.

• Any failure of our information technology systems could adversely affect our business and our operations.

• We have in the past made investments in entities that are not engaged in our line of business may not yield anticipated returns and may adversely affect our financial condition and results of operations.

• The COVID-19 pandemic has had a material and adverse impact on our business and operations, and it may continue to have an adverse effect on our business prospects, cash flows and future financial performance.

• We have set up one of our Centers located at GIFT City, Ahmedabad, under the revenue share model which exposes us to risks inherent in such a model and could adversely affect our business, prospects, results of operations, financial condition and cash flows.

• As of the Fiscals 2025, 2024 and 2023, we derived 40.06%, 47.38% and 34.10% of our revenue from operations, from the straight lease model and 23.05%, 29.00% and 23.23% of our revenue from operations, from the furnished by landlord model. Space owners demanding revenue-share models or launching competing flexible workspace offerings may adversely impact our margins, cash flows and profitability.

• A majority of our Centers operate under the straight lease model and any change in the landlord-operator dynamics or increased landlord participation in the flex space market may adversely impact our business, operations, cash flows, results of operations and profitability.

• Larger clients may outgrow our offerings and transition to direct leases with space owners, which may adversely impact our client retention, occupancy and revenue from operations.

• Shifts in work culture, such as the rise of remote and hybrid working models, could alter the demand for physical office spaces, which could adversely affect our business, results of operations, cash flows and financial condition.

• Our operations could be adversely affected by strikes, work stoppages, lockouts or increased wage demands by our employees or any other kind of disputes with our employees.

• We rely on contract labour for carrying out certain of our operations and we may be held responsible for paying the wages of such workers, if the independent contractors through whom such workers are hired default on their obligations, and such obligations could have an adverse effect on our results of operations, cash flows and financial condition.

• We are exposed to a variety of risks associated with safety, security and crisis management.

• Our business is sensitive to economic cycles and may be adversely impacted by economic downturns, hiring freezes, or corporate budget constraints.

• We have commissioned an industry report from JLL, which has been used for industry related data in this Red Herring Prospectus and such information is subject to inherent risks.

• The determination of the Price Band is based on various factors and assumptions and the Issue Price of the Equity Shares may not be indicative of the market price of the Equity Shares upon listing on the Stock Exchanges.

• Significant differences exist between Ind AS and other accounting principles, such as US GAAP and International Financial Reporting Standards ("IFRS"), which investors may be more familiar with and consider material to their assessment of our financial condition.

• Pursuant to listing of the Equity Shares, we may be subject to pre-emptive surveillance measures like Additional Surveillance Measure (ASM) and Graded Surveillance Measures (GSM) by the Stock Exchanges in order to enhance market integrity and safeguard the interest of investors.