Scoda Tubes

Specialised production of Stainless-Steel tubes and pipes.

International Accreditations and product approvals.

Customer Diversification and International Presence.

Extensive and Effective Quality Control.

Strategic location of Manufacturing Facility and fully integrated production.

Experienced and Qualified Team.

Consistent Financial Performance.

Its Business is primarily concentrated with the company`s top 10 customers. Any loss of its single largest customer or any number of its top ten customers or a reduction in purchases by any of them could adversely affect its business, results of operations and financial conditions.

The company relies on its network of stockists for the sale and distribution of its stainless-steel tubes and pipes, including one stockist based in Maharashtra, India and one based in the United States markets authorised to exclusively sell its products. Any termination of its sales arrangements with the company stockists or any failures of its stockists to effectively sell or market its products could materially and adversely affect its business, results of operations and financial condition.

Its business and profitability are substantially dependent on the demand for the company products from engineering, EPC and industrial companies, stockists, in and outside of India. Any reduction in the activity and expenditure levels in such customers may adversely affect its business, prospects, results of operations and financial condition.

The company and its Promoters have limited experience in implementing its growth strategy to expand the company welded tubes and pipes business which is presently smaller in scale. Its may not be able to compete successfully and it may be difficult to evaluate its business and future operating results on the basis of its past performance.

Capital expenditure is being used for welded pipes despite low-capacity utilization rate and may not result in increase in revenue from operations.

Its business and profitability are substantially dependent on the availability and cost of its raw materials, and the company is dependent on third-party suppliers/manufacturers/stockists for meeting its raw material requirements. Any disruption to the timely and adequate supply, or volatility in the prices of, raw materials may adversely impact its business, results of operations and financial condition.

Its business involves prolonged working capital days and an extended cash conversion cycle. If the company is unable to anticipate and respond to changes in market demands and customer preferences in a timely and efficient manner, its business, results of operations, cash flows and financial condition may be adversely affected.

The company has had negative net cash flows in the past and may continue to have negative cash flows in the future.

Its contingent liabilities could materially and adversely affect the company business, results of operations and financial condition.

Its revenue from operations is derived in part from the company exports, which the company intend to grow. Its growth plans and exports may be dependent on the policies passed by the governments of the markets into which the company export and any unfavourable change in such policies may adversely affect its business.

The company currently relies on its Manufacturing Facility located in Mehsana, Gujarat in India as its only manufacturing facility. The company business is dependent and will continue to depend on its Manufacturing Facility, and any slowdown or shutdown in its manufacturing operations, including as a result of adverse developments affecting this facility and the region could have an adverse effect on its business, results of operations and financial condition.

Any delays and/or defaults in payment of statutory dues by the Company may attract financial penalties from the respective governmental authorities and in turn may have an adverse impact on its financial condition.

The company has in the past entered into related party transactions and may continue to do so in the future.

Its current profit margins are low, and the company may not be able to improve its profit margins in the future.

Its Promoters have provided personal guarantees for certain borrowings obtained by the Company and any failures or default by the Company to repay such loans could trigger repayment obligations on its Promoters which may impact their ability to effectively service their obligations and thereby, adversely impact its business and operations.

The Company has unsecured loans that may be recalled by the lenders at any time and the Company may not have adequate funds to make timely payments or at all.

Any downgrade of its credit ratings could adversely affect the company business.

Its may not have sufficient insurance coverage to cover the company economic losses as well as certain other risks, not covered in its insurance policies, which could adversely affect business, results of operations and financial condition.

Its inability to collect receivables in time or at all, and any default in payment from its customers, could result in the reduction of the company profits and affect its cash flows.

Its may be required to import certain raw materials in which case the company could be subject to foreign currency fluctuations in respect of purchases of raw materials.

The company has incurred indebtedness, and an inability to comply with repayment and other covenants in its financing agreements could adversely affect its business and financial condition.

The company is dependent on third parties for the supply of utilities, such as water, gas and electricity, at its Manufacturing Facility, and any disruption in the supply of such utilities could adversely affect its manufacturing operations.

Exchange rate fluctuations may adversely affect its results of operations as the company sales from exports and a portion of its expenditures are denominated in foreign currencies such as in the U.S. Dollar and the Euro.

A part of its Manufacturing Facility is not owned by it. The company may not be able to renew the lease for its Manufacturing Facility on favourable terms.

The objects of the Issue include orders for plant and machinery which have not yet been placed and the company has not entered into any definitive agreements with any of the vendors. Further, the company is yet to place orders for capital expenditures. In the event of any delay in placement of such orders, the proposed schedule of implementation and deployment of the Net Proceeds may be extended or may vary.

If the company does not obtain, renew, or maintain the statutory and regulatory permits and approvals required to operate its business, it could have a material adverse effect on its business.

Its success largely depends upon the knowledge and experience of the company Promoters, Directors, Key Managerial Personnel and Senior Management as well as its ability to attract and retain personnel with technical expertise. Its inability to retain the company Directors, Key Managerial Personnel and Senior Management or its inability to attract and retain other personnel with technical expertise could adversely affect its business, results of operations and financial condition.

The demand and pricing in the stainless-steel tubes and pipes sector is volatile and sensitive to the cyclical nature of the industries it serves and raw material prices. A decrease in stainless-steel tubes and pipes prices and/or an increase in raw material prices may have a material adverse effect on its business, results of operations, prospects and financial condition.

Its may not accomplish the company growth strategies, and its business may suffer if the company fails to execute its growth strategies efficiently or effectively.

The company faces competition from domestic and international players, and its inability to compete effectively may have a material adverse impact on its business, results of operations and financial condition.

There are outstanding legal proceedings against the Company. Any adverse decision in such proceedings may render it/them liable to liabilities/penalties and may adversely affect its business, results of operations and financial condition.

Under-utilisation of its manufacturing capacities and any inability to effectively utilize its expanded manufacturing capacities could have an adverse effect on its business, future prospects and future financial performance. Its inability to accurately forecast demand for the company products may have an adverse effect on its business, results of operations and financial condition.

Its may not be able to optimally utilise the company backward integration to enhance and support its business which may affect its business, results of operations and financial condition.

Its business may expose the company to potential product recalls and returns, which could adversely affect its results operation, goodwill and the marketability of its products. Further, the company may be exposed to potential product liability claims which could adversely affect its results of operation, goodwill and the marketability of its products.

Its may be subject to industrial unrest and increased employee costs, which may adversely affect its business and results of operations.

Certain of its Promoter Group have interest in entities that are in businesses similar to its and this may result in a conflict of interest with the company.

The company is dependent on contract labour and any disruption to the supply of such labour for its Manufacturing Facility or the company inability to control the composition and cost of its contract labour could adversely affect its operations.

All the Directors on its board does not possess experience of being on the board of a listed company.

The company use third-party transportation and logistics service providers for delivery of its products to the company customers, as well as raw materials to its Manufacturing Facility. Any delay in delivery of the company products or raw materials or increase in the charges of these entities could adversely affect its business, results of operations and financial condition. The company also may be exposed to the risk of theft, accidents and/or loss of its products in transit.

The company has undertaken a bonus issue of Equity Shares in the past in the ratio of thirty (30) Equity Share for every one (1) Equity Share held, however there can be no assurance that the company will undertake the bonus issue of equity shares going forward.

Its Promoters are not the original Promoters of the Company and limited experience of its Promoters in managing the operations of the Company and limited experience in the industry in which the Company operates may pose operational and financial risks.

The company is subject to strict quality requirements, regular inspections and audits] by its customers, and any failures to comply with quality standards may lead to cancellation of existing and future orders and could negatively impact its business, financial condition, results of operations and prospects.

The company has incurred significant capital expenditures in the past and there can be no assurance that its past or planned capital expenditures will result in growth and/or additional revenue for the Company.

The company has substantial capital expenditure and working capital requirements and may requires additional financing to meet those requirements, which could have an adverse effect on its results of operations and financial condition.

Pricing pressure from its customers may adversely affect the company gross margin, profitability and ability to increase its prices, which may in turn have a material adverse effect on its results of operations and financial condition.

Its high debt-to-equity ratio may adversely affect the company financial condition and results of operations.

Its own a vacant land parcel which the company is not planning to utilise in its proposed expansion plan, and its inability to monetize or utilize it effectively may adversely affect its business and financial condition.

The company could incur losses under its purchase orders and contracts with its customers or be subjected to disputes or contractual penalties as a result of delays in delivery or failures to meet contract specifications or delivery schedules which may have a material adverse effect on its business, results of operations and financial condition.

Non-compliance with and changes in, safety, health, environmental laws and other applicable regulations in India, may adversely affect its business, results of operations and financial condition.

The company own a trademark. The company also relies on a combination of trade secret and contractual restrictions to protect its intellectual property. If the company is unable to protect its intellectual property rights, its business, results of operations and financial condition may be adversely affected.

The company requires various licenses and approvals for undertaking its businesses and the failures to obtain or retain such licenses or approvals in a timely manner, or at all, may adversely affect its business, results of operations and financial condition.

After the completion of the Issue, its Promoters will continue to collectively hold substantial shareholding in the Company.

Its Independent Director`s does not have sufficient experience of being an Independent Director in a Company.

Any variation in the utilisation and period of utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior shareholders` approval.

Its funding requirements and the proposed deployment of Net Proceeds have not been appraised by any bank or financial institution or any other independent agency and its management will have broad discretion over the use of the Net Proceeds.

Its inability to successfully implement some or all its business strategies in a timely manner or at all could have an adverse effect on its business.

If the company does not continue to invest in new equipment and machinery, its equipment and machinery may become obsolete and its production costs may increase relative to its competitors, which may have an adverse impact on its business, results of operations and financial condition.

The company might infringe upon the intellectual property rights of others and any misappropriation of its intellectual property could harm its competitive position.

There have been instances of delayed compliances in the statutory filings.

Its business operations are subject to certain threats and weaknesses.

There is no guarantee that its Equity Shares will be listed on the BSE and the NSE in a timely manner or at all.

Failures or disruption of its ERP and/or IT systems may adversely affect its business, results of operations and financial condition.

Its employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

If the company is unable to establish and maintain an effective internal controls and compliance system, its business and reputation could be adversely affected.

Information relating to the installed manufacturing capacity, actual production and capacity utilisation of its Manufacturing Facility included in this Red Herring Prospectus is based on various assumptions and estimates and future production and capacity may vary.

Certain sections of this Red Herring Prospectus contain information from the CRISIL Report which the company commissioned and purchased and any reliance on such information for making an investment decision in the Issue is subject to inherent risks.

The company has in this Red Herring Prospectus included certain Non-GAAP Measures that may vary from any standard methodology that is applicable across the stainless-steel tubes and pipes industry and may not be comparable with financial information of similar nomenclature computed and presented by other companies.