Euro Pratik Sales IPO: The book build issue of Euro Pratik Sales, worth ₹451.31 crore, will open for subscription on September 16, 2025, and close on September 18, 2025.
Here are five key risks that investors should know from the RHP before subscribing:
Euro Pratik Sales IPO: 5 key risks from the RHP
1. Dependence on contract manufacturers
Euro Pratik Sales Ltd highlighted that they are significantly dependent on their contract manufacturers for the manufacturing of products.
In the six months ended September 30, 2024 and in Fiscals 2024, 2023 and 2022, 32.08%, 70.56%, 56.18%and 46.05%, respectively, of its total value of products purchased were manufactured by its top contract manufacturer and 47.95%, 91.66%, 87.88% and 86.02%, respectively, of its total value of products purchased were manufactured by its top 10 contract manufacturers.
Any loss of its contract manufacturers, if not suitably replaced, could materially and adversely affect Euro Pratik Sales’ business, results of operations and financial condition.
2. Reliance on one segment
Euro Pratik Sales have also said that they depend significantly on revenue from the sale of decorative wall panels, which contributed to 68.97%, 76.54%, 66.12%and 54.97% of its revenue from operations for the six-month period ended September 30, 2024 and in Fiscals 2024, 2023 and 2022, respectively.
As a result, the business may be materially and adversely affected if it is unable to sell decorative wall panels as expected or if substitute products become available or gain wider market acceptance.
3. Uncertain real estate market
The company’s products are primarily used in residential and commercial real estate projects. Any slowdown in the real estate and infrastructure industries and the economy in general could affect the Decorative Wall Panel and Decorative Laminates industries, in turn impacting Euro Pratik Sales.
4. Brand name
Euro Pratik Sales said, “We do not own the brand name Euro Pratik, which is crucial for our operations.”
Any failure to use, protect and leverage our “Euro Pratik” brand could materially and adversely affect its competitive position, business, results of operations and financial condition.
5. Negative cash flow
The company experienced negative cash flows from operating activities during Fiscal 2025. If it experiences similar negative cash flows from operating activities in the future, it could adversely affect its financial condition.
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