This document outlines the details of Boss Packaging Solutions Limited's (the Company) Initial Public Offering (IPO). It covers the following key points:

1. The Issue:

• The Company is issuing 12,74,000 equity shares at a price of ₹66 per share, aggregating to ₹840.84 lakhs.
• The net issue to the public is 12,08,000 shares, with 50% allocated to retail investors and the remaining to non-retail investors.
• The issue proceeds, after deducting expenses, are estimated to be ₹775.84 lakhs.

2. Utilization of Issue Proceeds:

• The net proceeds will be used for:
  • Purchasing machinery (₹333.70 lakhs)
  • Funding working capital requirements (₹300.00 lakhs)
  • General corporate purposes (₹142.14 lakhs)
• The Company plans to utilize the proceeds by the end of Fiscal 2025.
• In case of variations in utilization, the Company may explore options like internal accruals and additional debt.

3. Basis for the Issue Price:

• The issue price is determined by the Company in consultation with the Lead Manager based on qualitative and quantitative factors.
• Qualitative factors include:
  • Strong marketing and distribution network
  • Diversified customer base
  • Diversified product portfolio
  • Experienced promoter directors
• Quantitative factors include:
  • Basic and diluted EPS
  • Price to Earnings (P/E) ratio
  • Return on Net Worth (RoNW)
  • Net Asset Value (NAV)
  • Key Performance Indicators (KPIs)

4. Special Tax Benefits:

• The Company may be eligible for special tax benefits under the Income Tax Act, 1961 and the Goods and Service Tax Act, 2017.
• These benefits include:
  • Concessional tax rate under Section 115BAA of the Act
  • Deduction under Section 80M of the Act for dividend received
  • Deduction under Section 80JJAA of the Act for additional employee cost
  • Advance authorization scheme under FTP
  • Export Promotion Capital Goods (EPCG) Scheme
• Shareholders may also be eligible for tax benefits on dividend income and long-term capital gains.

5. Key Intermediaries:

• Lead Manager: Fedex Securities Private Limited
• Legal Counsel: Vidhigya Associates, Advocates
• Registrar to the Issue: KFIN Technologies Limited
• Banker: ICICI Bank Limited and HDFC Bank Limited
• Market Maker: B.N. Rathi Securities Limited
• Underwriter: Fedex Securities Private Limited
• Banker/Sponsor Bank/Refund Bank: Axis Bank Limited
• Statutory Auditor: DJNV & Co.

6. Other Information:

• The Company has one class of share capital: Equity Shares of face value ₹10 each.
• The Company has not issued any shares for consideration other than cash or by way of bonus issue.
• The Company has not appointed any appraising agency for appraisal of the project.
• The Company is not required to appoint a monitoring agency for the utilization of the issue proceeds.
• The Company confirms that it will not use the issue proceeds for financing or providing loans to the Promoter Group.
• The Company reserves the right to withdraw the issue at any time before the Board meeting for allotment.

7. Capital Structure:

• The Company's authorized share capital is ₹500.00 lakhs.
• The issued, subscribed, and paid-up share capital before the issue is ₹317.22 lakhs.
• The post-issue paid-up capital is expected to be ₹444.62 lakhs.

8. Shareholding Pattern:

• The Promoters hold 100% of the pre-issue equity share capital.
• The Promoters' contribution will be locked-in for a period of three years from the date of allotment.
• Other pre-issue shares will be subject to a lock-in period of one year.

9. Risk Factors:

• The document highlights various risk factors that could affect the market price of the equity shares after the issue.
• These factors include broad market trends, financial performance of the Company, and other factors beyond its control.

10. Disclaimer:

• The document emphasizes that the information provided is for general information purposes only and should not be considered as professional tax advice.
• Investors are advised to consult their own tax advisors for specific tax implications.

Boss Packaging Solutions Limited: A Comprehensive Overview

Boss Packaging Solutions Limited is a manufacturer, supplier, and exporter of diversified packaging machines based in Ahmedabad, India. Established in 2012, the company has grown to offer a wide range of products, including labeling machines, shrink sleeve applicators, capping machines, filling machines, shrink wrapping machines, and complete packaging lines.

Key Products and Solutions:

• Labelling Machines: Offer various models for full/partial labeling on different container sizes, including automatic and semi-automatic options.
• Shrink Sleeve Applicators: Used for applying shrink sleeve labels onto containers, finding applications in food, beverages, personal care, and pharmaceuticals.
• Capping and Sealing Technologies: Provide screw, ROPP, crown, and lug capping machines, catering to various industries like pharmaceuticals and FMCG.
• Filling Technologies: Offer liquid and powder filling machines with various options like servo gear pump, servo syringe, and volumetric filling.
• Shrink Wrapping Machines: Provide fully automatic shrink packaging machines, including web sealers and shrink tunnels, for various industries.
• Full Packaging Lines: Offer complete packaging lines for various products, including liquids, creams, honey, paint, flavored milk, syrup, pesticides, chemicals, edible oil, ghee, and sauce.

Target Industries:

Boss Packaging Solutions caters to a diverse range of industries, including pharmaceuticals, distilleries, breweries, lubricant & edible oil, cosmetics, toiletries, food & beverages, pesticides & chemicals, dairy products, juice & fruit drinks, and sauce, jam, and mayonnaise.

Financial Performance:

The company has shown consistent growth in revenue and profitability over the past three years. In Fiscal 2024, revenue from operations reached ₹1217.44 lakhs, with a profit after tax of ₹101.04 lakhs.

Competitive Strengths:

• Strong Marketing and Distribution Network: The company has an in-house sales and marketing team, along with a strong after-sales service team.
• Diversified Customer Base: Boss Packaging Solutions serves a diverse customer base across various industries and geographies, reducing dependence on any single customer.
• Diversified Product Portfolio: The company offers a wide range of products, allowing existing customers to source most of their packaging machine requirements from a single vendor.
• Experienced Promoter Directors: The company is led by experienced promoters with extensive domain knowledge in the packaging industry.

Business Strategies:

• Increasing Geographical Presence: The company aims to expand its presence in India and internationally to reach a larger market.
• Focus on Quality: Boss Packaging Solutions is committed to maintaining high-quality standards for its products and services.
• Widening Product Basket: The company plans to expand its product portfolio by developing new and advanced machines, including aseptic brick pack machines, BOPP labeling machines, unscrambling machines, RFC machines, carbonated filling machines, and high-speed filling machines.
• Augmenting Manufacturing Capabilities: The company is investing in new plant and machinery to increase its production capacity and meet growing demand.
• Improving Operational Efficiencies: Boss Packaging Solutions is focused on improving operational effectiveness by investing in automation, modern technology, and equipment.

Key Regulations and Policies:

The company operates within the framework of various Indian regulations and policies, including those related to public liability, corporate and commercial law, industrial law, labor and employment, environment protection, intellectual property, and foreign exchange.

Corporate Governance:

Boss Packaging Solutions has a Board of Directors comprising executive directors, a non-executive woman director, and independent directors. The company has established an Audit Committee, Nomination and Remuneration Committee, and Stakeholders Relationship Committee to ensure good corporate governance practices.

Overall, Boss Packaging Solutions Limited is a well-established company with a strong track record of growth and profitability. The company is well-positioned to capitalize on the growing demand for packaging machines in India and globally. Its focus on quality, innovation, and customer satisfaction, coupled with its experienced management team, positions it for continued success in the future.

Boss Packaging Solutions Limited: Financial Summary

This financial summary provides an overview of Boss Packaging Solutions Limited's (the "Company") financial performance and position based on the provided data.

I. Company Overview

• Business: The Company manufactures packaging, filling, and labeling machines.
• Location: The Company's manufacturing facility and registered office are located in Ahmedabad, Gujarat, India.
• Product Portfolio: The Company offers a wide range of packaging machinery, including:
  • Liquid Filling Machines (Semi-Automatic and Automatic)
  • Capping Machines (Screw and ROPP)
  • Pick and Place Screw Capping Machines
  • Self-Adhesive Sticker Labelling Machines
  • Hologram Applicator Machines
  • Shrink Sleeve Applicator Machine
  • Conveyors and Turn Tables
  • Air Jet Cleaning Machine
  • Shrink-wrapping Machines (Web Sealer)
  • Electric Tunnels
  • Winder, Rewinder
  • Customized Atomization
• Target Market: The Company caters to diverse customer requirements in the packaging industry.

II. Financial Highlights

Metric	Fiscal 2024	Fiscal 2023	Fiscal 2022
Revenue from Operations (₹ in Lakhs)	1,217.44	1,033.89	547.40
Growth in Revenue from Operations (%)	17.75	88.87	NA
EBITDA (₹ in Lakhs)	155.57	143.69	69.19
EBITDA Margin (%)	12.78	13.90	12.64
Profit After Tax (₹ in Lakhs)	101.04	100.51	41.77
PAT Margin (%)	8.30	9.72	7.63
ROE (%)	22.31	49.75	41.14
Capital Employed (₹ in Lakhs)	518.55	205.74	121.26
ROCE (%)	28.99	67.35	53.26
Debt (₹ in Lakhs)	65.62	3.70	19.73
Net Debt (₹ in Lakhs)	308.67	306.07	164.26
Debt-Equity Ratio	0.14	0.02	0.19
Net Debt-EBITDA Ratio	1.98	2.13	2.37
Net Tangible Assets (₹ in Lakhs)	452.93	202.04	101.53
Monetary Assets (₹ in Lakhs)	4.49	28.01	13.42
% of Monetary Assets to Net Tangible Assets	0.99	13.86	13.22
Net Worth (₹ in Lakhs)	452.93	202.04	101.53
Return on Net Worth (%)	22.31	49.75	41.14
Pre-Tax Operating Profit (₹ in Lakhs)	150.21	137.74	63.77
Net Asset Value per Equity Share (₹)	14.28	12.95	6.91
Number of Customers	70	61	56
Sales to Customers (₹ in Lakhs)	17.39	16.95	9.78
Gross Profit (₹ in Lakhs)	388.79	360.04	208.29
Gross Profit Margin (%)	31.94	34.82	38.05

III. Financial Statements

A. Restated Statement of Assets and Liabilities (as of March 31st)

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Shareholders' Funds
Share Capital (₹ in Lakhs)	317.23	1.00	1.00
Reserves & Surplus (₹ in Lakhs)	135.70	201.04	100.53
Non-Current Liabilities (₹ in Lakhs)
Long Term Borrowings	30.62	0.77	3.66
Current Liabilities (₹ in Lakhs)
Short Term Borrowings	35.00	2.93	16.07
Trade Payables	122.42	233.12	91.89
Other Current Liabilities	78.16	57.74	47.30
Short Term Provisions	46.94	39.52	18.76
Total Equity and Liabilities (₹ in Lakhs)	766.10	536.12	279.21
Non-Current Assets (₹ in Lakhs)
Property, Plant & Equipment	13.13	12.86	13.43
Deferred Tax Assets (Net)	1.46	1.37	1.07
Current Assets (₹ in Lakhs)
Inventories	445.56	173.05	168.59
Trade Receivables	261.76	295.81	54.00
Cash & Cash Equivalents	4.50	28.01	13.42
Short-Term Loans & Advances	39.69	25.02	28.70
Total Assets (₹ in Lakhs)	766.10	536.12	279.21

B. Restated Statement of Profit and Loss (for the year ended March 31st)

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Revenue from Operations (₹ in Lakhs)	1,217.44	1,033.89	547.40
Other Income (₹ in Lakhs)	0.10	0.82	0.81
Total Income (₹ in Lakhs)	1,217.54	1,034.71	548.21
Expenses (₹ in Lakhs)
Cost of Material Consumed	828.65	673.85	339.11
Employee Benefit Expenses	173.06	147.48	102.36
Finance Costs	11.39	3.95	8.52
Depreciation & Amortization Expense	5.26	5.13	4.61
Other Expenses	60.27	69.69	37.55
Total Expenses (₹ in Lakhs)	1,078.62	900.10	492.15
Profit Before Tax (₹ in Lakhs)	138.93	134.61	56.06
Tax Expense (₹ in Lakhs)
Current Tax	35.50	34.40	14.55
Deferred Tax	(0.09)	(0.30)	(0.26)
Current Tax Adjustment of Earlier Years	2.48	0.00	0.00
Profit After Tax (₹ in Lakhs)	101.04	100.51	41.77
Earnings Per Share (Basic & Diluted) (₹)	3.38	6.44	2.68

C. Restated Statement of Cash Flow (for the year ended March 31st)

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Cash Flow from Operating Activities (₹ in Lakhs)
Restated Net Profit Before Tax & Extraordinary Items	138.93	134.61	56.06
Adjustments for:
Interest Received	(0.10)	(0.78)	(0.81)
Deferred Tax Adjustment	(0.09)	(0.30)	(0.26)
Interest & Finance Charges Paid	11.39	3.95	8.52
Depreciation	5.26	5.13	4.61
Operating Profit Before Working Capital Changes	155.38	142.61	68.12
Changes in Working Capital:
(Increase)/Decrease in Trade Receivables	34.05	(241.81)	38.80
(Increase)/Decrease in Inventories	(272.51)	(4.46)	(44.02)
(Increase)/Decrease in Short Term Loans & Advances	(14.67)	3.68	(3.63)
(Increase)/Decrease in Trade Payables	(110.69)	141.23	(13.38)
(Increase)/Decrease in Other Current Liabilities	20.42	10.44	17.23
(Increase)/Decrease in Short Term Provisions	7.42	20.76	0.57
Cash Generated from/(Used in) Operating Activities	(180.60)	72.45	63.68
Less: Income Tax	37.91	34.11	14.33
Net Cash Generated from/(Used in) Operating Activities	(218.51)	38.34	49.35
Cash Flow from Investing Activities (₹ in Lakhs)
(Increase)/Decrease in Non-Current Investment	-	-	-
Interest Received	0.10	0.78	0.81
(Purchase) of Tangible Fixed Assets	(5.51)	(4.56)	(6.38)
Net Cash Generated from/(Used in) Investing Activities	(5.41)	(3.78)	(5.57)
Cash Flow from Financing Activities (₹ in Lakhs)
Proceeds from Issue of Share Capital	149.86	-	-
(Increase)/Decrease in Short Term Borrowings	32.07	(13.14)	(12.36)
(Increase)/Decrease in Long Term Borrowings	29.86	(2.88)	(19.92)
Interest & Finance Charges Paid	(11.39)	(3.95)	(8.52)
Net Cash Generated from/(Used in) Financing Activities	200.41	(19.97)	(40.80)
Net Increase/(Decrease) in Cash & Cash Equivalents	(23.51)	14.59	2.98
Cash & Cash Equivalents at the Beginning of the Year	28.01	13.42	10.44
Cash & Cash Equivalents at the End of the Year	4.50	28.01	13.42

IV. Notes to Financial Statements

A. Significant Accounting Policies

• Basis of Preparation: The Restated Financial Statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention.
• Use of Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported balances of assets and liabilities.
• Fixed Assets & Depreciation:
  • Tangible assets are stated at historical cost less accumulated depreciation.
  • Depreciation is provided on a pro rata basis using the WDV method based on the estimated useful life of the assets.
• Intangible Assets: Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses.
• Inventories:
  • Raw materials are valued at cost price.
  • Finished goods are valued at the lower of cost or net realizable value.
  • Stock in process is valued at cost price.
• Revenue Recognition:
  • Revenue from sale of goods is recognized when the significant risks and rewards of ownership are transferred to the buyer.
  • Revenue from services is recognized pro-rata over the period of the contract as services are rendered.
• Taxation: Tax expenses comprise current tax and deferred tax charge or credit.
• Borrowing Costs: Borrowing costs relating to the acquisition/construction of qualifying assets are capitalized. All other borrowing costs are charged to revenue.
• Earnings per Share: Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of Equity Shares outstanding.
• Provisions, Contingent Liabilities & Contingent Assets: Provisions are recognized for present obligations arising from past events. Contingent liabilities are disclosed by way of a note to the financial statement. Contingent assets are neither recognized nor disclosed.
• Cash Flows: Cash flows are reported using the indirect method.

B. Related Party Transactions

Name	Relation	Nature of Transaction	Fiscal 2024	Fiscal 2023	Fiscal 2022
Manishbhai Brahmbhatt	Director	Director's Remuneration	5.40	6.00	6.00
		Loan Received	6.45	-	-
		Loan Repaid	6.45	-	-
Ketan Thakkar	Director	Director's Remuneration	5.70	9.00	6.40
		Loan Received	6.45	-	-
		Loan Repaid	6.45	-	-
Jagrutiben Brahmbhatt	Director	Director's Remuneration	3.00	6.00	3.60
Kamlesh Patel	Promoter	Director's Remuneration	4.20	6.00	6.40
		Loan Received	1.45	-	-
		Loan Repaid	1.45	-	-
Bhavika Thakkar	Relative of Director	Salary	3.30	7.20	-
		Rent Paid	5.34	4.85	4.62
Boss Enterprise (Partnership Firm)	Relatives of Directors are Partners	Purchases of Material	-	15.15	38.44

C. Segment Reporting

The Company operates in a single operating segment, namely Machine Manufacturing. Therefore, segment reporting is not applicable.

D. Capitalization

Particulars	Pre-Issue Figures (as on 31/03/2024)	As Adjusted for Proposed Issue
Debt (₹ in Lakhs)
Short Term Debt	35.00	35.00
Long Term Debt	30.62	30.62
Total Debt	65.62	65.62
Shareholders' Funds (₹ in Lakhs)
Share Capital	317.23	444.63
Reserve and Surplus (As Restated)	135.70	849.14
Total Shareholders' Fund	452.93	1,293.77
Long Term Debt/Shareholders' Fund	0.07	0.02
Total Debt/Shareholders' Fund	0.14	0.05

E. Tax Shelter

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Profit Before Taxes (As Restated) (₹ in Lakhs)	138.93	134.61	56.06
Normal Corporate Tax Rate (%)	25.17	25.17	22.88
MAT Rate (%)	16.69	16.69	15.60
Timing Differences (₹ in Lakhs)	0.36	1.21	1.03
Tax Expenses/(Saving) Thereon (₹ in Lakhs)	0.09	0.30	0.24
Income/(Loss) (₹ in Lakhs)	139.28	135.81	57.09
Tax Liability After Considering MAT Credit (₹ in Lakhs)	34.99	34.18	13.06
Total Tax as per Return of Income (Before Interest) (₹ in Lakhs)	34.99	34.18	13.06

F. Net Worth Statement

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Net Worth (₹ in Lakhs)	452.94	202.04	101.53

G. Earnings per Share

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Restated Earnings per Share (Basic & Diluted) Pre Bonus (₹)	3.38	1,005.11	417.68
Restated Earnings per Share (Basic & Diluted) Post Bonus (₹)	3.38	6.44	2.68

H. Auditors' Remuneration

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Payments to Auditor (₹ in Lakhs)	0.30	0.30	0.36

I. Contingent Liabilities and Commitments

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Total	-	-	-

J. Expenditure in Foreign Currency

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Total	-	-	-

K. Earnings in Foreign Currency

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Total	-	8.00	11.55

L. MSMEs

Particulars	Fiscal 2024	Fiscal 2023	Fiscal 2022
Principle Amount (₹ in Lakhs)	84.83	121.44	2.87

M. Other Notes

• Title Deed of Immovable Property: The Company does not own any immovable property.
• Benami Property: The Company does not have any Benami property.
• Security of Current Assets Against Borrowings: The Company does not have any security of current assets against borrowings.
• Wilful Defaulter: The Company is not declared as a wilful defaulter by any bank or financial institution.
• Transactions with Struck Off Companies: The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.
• Registration of Charges or Satisfaction with ROC: The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
• Scheme of Arrangements: There is no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013.
• Utilisation of Borrowed Funds and Share Premium: The Company has not advanced, loaned, or invested funds to any other person(s) or entity(ies) with the understanding that the intermediary shall directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company.
• Undisclosed Income: The Company does not have any transactions which are not recorded in the books of accounts that have been surrendered or disclosed as income during the years in the tax assessments under the Income Tax Act, 1961.
• Compliance with Number of Layers of Companies: The Company does not have any subsidiaries.
• Disclosure Pertaining to 'Details of Crypto Currency or Virtual Currency': The Company has not traded or invested in Crypto currency or Virtual Currency during the reporting periods.
• Revaluation of PPE and Intangible Assets: The Company has not revalued its Property, Plant and Equipment and Intangible assets during the reporting periods.
• Disclosure Pertaining to 'Corporate Social Responsibility Activities': The Company is not covered under section 135 of the Companies Act, 2013.

V. Management Insights

• Growth Strategy: The Company has expanded its equipment portfolio to cater to diverse customer requirements.
• Market Demand: The Company has witnessed an increase in demand for its products, driven by the overall market growth.
• Sales & Marketing: The Company has implemented aggressive marketing and business development strategies to drive sales growth.
• Financial Management: The Company has managed its working capital effectively and has been able to increase its profitability.
• Future Plans: The Company is focused on expanding its product portfolio and increasing its market share.

VI. Market Factors

• Packaging Industry Growth: The packaging industry is expected to continue to grow in the coming years, driven by factors such as increasing urbanization, rising disposable incomes, and growing e-commerce.
• Competition: The packaging machinery market is competitive, with several players operating in the industry.
• Government Regulations: The packaging industry is subject to various government regulations, which can impact the Company's operations.

Disclaimer: This financial summary is based on the provided data and does not constitute financial advice. It is important to conduct thorough due diligence and consult with a qualified financial advisor before making any investment decisions.

Executive Summary: Legal Risk Analysis of Boss Packing Solutions Limited IPO

This executive summary analyzes the legal risks associated with Boss Packing Solutions Limited's (BPSL) Initial Public Offering (IPO) based on the provided prospectus. The analysis focuses on identifying potential legal pitfalls, ambiguities, red flags, and unspoken issues that could impact the company's future.

Overall Impression:

While BPSL presents a seemingly solid financial track record, the prospectus reveals several concerning ambiguities and potential legal risks that warrant further investigation. The company's reliance on a few key customers and suppliers, coupled with a lack of transparency regarding outstanding legal proceedings and tax liabilities, raises significant concerns for investors.

Key Findings:

1. Dependence on a Few Customers and Suppliers:

• BPSL's revenue is heavily concentrated, with the top 10 customers contributing 60% of revenue in FY24. This dependence creates significant vulnerability to customer churn or changes in purchasing patterns.
• The company's reliance on a few key suppliers (72.43% of purchases from top 10 suppliers in FY24) raises concerns about supply chain disruptions and potential price gouging.
• The prospectus does not disclose the names of these key customers and suppliers, citing non-receipt of consent. This lack of transparency raises concerns about potential conflicts of interest or undisclosed relationships.

2. Ambiguous Legal Proceedings and Tax Liabilities:

• The prospectus states that there are no "outstanding material dues to creditors." However, the company's trade payables as of March 31, 2024, were ₹122.42 lakhs, and any creditor with outstanding dues exceeding 10% of this amount (₹12.24 lakhs) is considered a "material creditor."
• The prospectus lists three outstanding indirect tax cases with an aggregate amount involved of ₹1.72 lakhs. However, the details of these cases are vague, and the potential impact on the company's financial performance is unclear.
• The prospectus states that there are no "outstanding actions by regulatory and statutory authorities." However, the company's disclosure regarding the "Intimation Acknowledgement for Factory falling under white category" under the Water (Prevention & Control of Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981, suggests potential environmental compliance issues.

3. Potential Conflicts of Interest and Lack of Transparency:

• The prospectus does not disclose the names of the top 10 customers and suppliers, citing non-receipt of consent. This lack of transparency raises concerns about potential conflicts of interest or undisclosed relationships.
• The prospectus does not provide details about the nature of the three outstanding indirect tax cases, making it difficult to assess their potential impact on the company's financial performance.
• The prospectus does not disclose any information about the company's environmental compliance record, despite mentioning the "Intimation Acknowledgement for Factory falling under white category" under the Water (Prevention & Control of Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981.

4. Potential Future Legal Risks:

• The company's reliance on a few key customers and suppliers creates significant vulnerability to customer churn or changes in purchasing patterns, which could lead to legal disputes.
• The company's ambiguous disclosure regarding outstanding legal proceedings and tax liabilities suggests potential future legal risks, particularly if these issues are not addressed proactively.
• The company's lack of transparency regarding its environmental compliance record raises concerns about potential future legal risks related to environmental regulations.

5. Economic Impact of the Issue:

• The IPO proceeds will be used to fund the company's expansion plans, which could lead to increased revenue and profitability.
• However, the company's dependence on a few key customers and suppliers, coupled with its ambiguous disclosure regarding outstanding legal proceedings and tax liabilities, could negatively impact investor confidence and hinder the company's growth prospects.

Recommendations:

• BPSL should provide more detailed information about its key customers and suppliers, including their names and the nature of their relationships with the company.
• The company should provide a more detailed explanation of the outstanding indirect tax cases, including the nature of the disputes and the potential impact on the company's financial performance.
• BPSL should disclose its environmental compliance record and any potential environmental liabilities.
• The company should proactively address any outstanding legal proceedings and tax liabilities to mitigate potential future legal risks.

Conclusion:

BPSL's IPO presents a mixed bag for investors. While the company has a strong financial track record, the prospectus reveals several concerning ambiguities and potential legal risks that warrant further investigation. Investors should carefully consider these risks before making an investment decision.

Table: Key Financial Data (₹ in Lakhs)

Particulars	FY22	FY23	FY24
Net Profit	41.77	100.51	101.04
Cash Accruals	68.38	142.87	152.99
Net Worth	101.53	202.04	452.93
Top 10 Customers Revenue Contribution (%)	56.27	53.59	60.00
Top 10 Suppliers Purchase Contribution (%)	67.77	82.24	72.43
Trade Payables	NA	NA	122.42
Outstanding Indirect Tax Cases (Amount Involved)	NA	NA	1.72

Risk Analysis of IPO Red Herring Document

This analysis focuses on identifying explicit and implicit risks within the provided IPO red herring document, prioritizing those that are most relevant and potentially impactful to the business.

Company Overview

• Industry: Manufacturer, supplier, and exporter of diversified packaging, capping, filling machines, self-adhesive sticker labeling machine, conveyors, turn tables, web sealers, sleeve applicator etc.
• Location: Manufacturing unit located in Ahmedabad, Gujarat.
• Customer Concentration: Top 10 customers contributed 60.00%, 53.59%, and 56.27% (inclusive of taxes) of revenue from operations for Fiscal 2024, Fiscal 2023, and Fiscal 2022, respectively.
• Export Revenue: Nil, ₹ 8.00 lakhs, and 11.55 lakhs for Fiscal 2024, Fiscal 2023, and Fiscal 2022, respectively.

Explicit Risks

1. Operational Risks:

• Geographic Concentration: All operations are concentrated in Ahmedabad, Gujarat, making the company vulnerable to adverse developments in the region.
• Manufacturing Unit Disruption: Any disruption in the manufacturing unit, including equipment failure, power outages, or natural disasters, could significantly impact production and revenue.
• Capacity Utilization: The manufacturing unit is not operating at optimal capacity, raising concerns about future growth and profitability.
• Customer Concentration: Loss of any significant customer could have a material adverse effect on revenue and profitability.
• Capital Expenditure: Delays in placing orders for new equipment or vendor inability to deliver could lead to time and cost overruns.
• Working Capital Intensity: The company's working capital requirements are high, and any shortfall in cash flow could negatively impact operations.
• Regulatory Compliance: Failure to obtain, renew, or maintain necessary permits and approvals could disrupt operations.
• Product Defects: Defective products could lead to order cancellations, liability claims, and reputational damage.
• Key Personnel: Loss of key management personnel could hinder the company's ability to execute its growth strategy.
• Workplace Safety: The manufacturing process involves inherent risks, and any accidents could result in significant costs and liabilities.
• Competition: The industry is fragmented and competitive, with potential for increased capacity expansion and price pressure.
• Non-Compliance: Past instances of non-compliance with regulatory filings raise concerns about future regulatory actions and penalties.
• Foreign Exchange Risk: Fluctuations in exchange rates could impact export revenue and profitability.
• Raw Material Supply: Disruptions or price increases in raw material supply could affect production costs and profitability.
• Third-Party Logistics: Dependence on third-party logistics providers exposes the company to risks of service disruptions and potential liability.
• Outstanding Tax Demand: The company has outstanding tax demands, which could lead to financial penalties and reputational damage.
• Trademark Protection: Pending trademark registration exposes the company to unauthorized use and potential dilution of goodwill.
• Regulatory Changes: Changes in regulations governing the company's products or the products of its customers could impact operations and profitability.
• Insurance Coverage: Inadequate insurance coverage could leave the company exposed to significant financial losses in the event of unforeseen events.
• Growth Management: Inability to effectively manage growth or implement strategies could negatively impact operations and profitability.
• Promoter Influence: The promoters' continued majority ownership could lead to conflicts of interest and potentially disadvantage other shareholders.
• Related Party Transactions: The company has a history of related party transactions, which could raise concerns about potential conflicts of interest and fairness.
• IT System Failure: Disruptions to the company's IT systems could disrupt operations and lead to data loss.
• Dividend Policy: The company's ability to pay dividends in the future is uncertain and depends on various factors.
• Statutory Dues: Past delays in paying statutory dues raise concerns about future compliance and potential penalties.
• Client Payment Delays: Delays or defaults in client payments could reduce profitability.
• Issue Proceeds Utilization: Any variation in the utilization of issue proceeds requires shareholder approval, which could be challenging to obtain.
• Negative Cash Flows: The company has experienced negative cash flows in the past, and this could continue in the future, impacting financial performance.
• Issue Completion Delay: Delays in completing the IPO could disrupt the company's growth plans and impact revenue.
• Issue Proceeds Utilization Deviation: Any material deviation in the utilization of issue proceeds requires compliance with applicable law.
• Unsecured Loans: The company has unsecured loans repayable on demand, and any demand for repayment could strain cash flow and financial condition.
• Listing Requirements: The requirements of being a listed entity could strain the company's resources.
• Equity Share Dilution: Future issuance of equity shares or sales by promoters could dilute shareholder holdings and impact the share price.
• Tax Law Changes: Changes in tax laws or regulations could significantly impact the company's financial statements and profitability.
• Data Reliability: The accuracy and completeness of statistical and industry data used in the prospectus cannot be guaranteed.
• Monitoring Agency: The company has not appointed a monitoring agency to oversee the utilization of issue proceeds, raising concerns about transparency and accountability.
• Alternate Funding: The company has not identified alternate sources of funding, making it vulnerable to shortfalls in issue proceeds and potential delays in growth plans.
• Registered Office Lease: The company's registered office is leased, and any disruption or termination of the lease agreement could impact operations.
• Capacity Utilization Estimates: Estimates of installed capacity and historical capacity utilization are based on assumptions, and future production and capacity utilization may vary.

Implicit Risks

1. Management Experience and Expertise:

• Lack of Experience: The company has no experience as a listed entity, which could pose challenges in navigating the increased scrutiny and regulatory requirements.
• Key Personnel Reliance: The company's success is heavily reliant on a few key management personnel, and their departure could significantly impact operations.
• Unverified Information: Reliance on affidavits for information about directors' profiles raises concerns about the accuracy and completeness of the data.

2. Financial Sustainability:

• High Debt Levels: The company has a significant amount of unsecured loans, which could increase financial risk and limit its ability to access future financing.
• Cash Flow Volatility: The company's history of negative cash flows raises concerns about its ability to generate sufficient cash flow to support growth and meet financial obligations.
• Working Capital Management: The company's reliance on unsecured loans from related parties highlights potential risks associated with managing working capital and maintaining financial stability.

3. Market and Industry Dynamics:

• Economic Downturn: The capital goods industry is sensitive to economic downturns, which could negatively impact demand for the company's products.
• Technological Advancements: The company's ability to keep pace with technological advancements is crucial for maintaining competitiveness and profitability.
• Global Economic Instability: The company's operations could be affected by global economic instability, including geopolitical events and pandemics.

4. Regulatory and Legal Environment:

• Tax Law Interpretation: The company's operations are subject to various tax regimes, and any changes in tax laws or their interpretation could impact profitability.
• Labor Code Changes: The implementation of new labor codes in India could impact the company's labor costs and operations.
• Foreign Investment Restrictions: Restrictions on foreign investment could limit the company's ability to attract capital and potentially impact the share price.

5. Transparency and Governance:

• Lack of Monitoring Agency: The absence of a monitoring agency to oversee the utilization of issue proceeds raises concerns about transparency and accountability.
• Promoter Control: The promoters' significant influence over the company's decision-making process could lead to potential conflicts of interest and raise concerns about shareholder rights.

6. Overall Risk Assessment:

• High Risk Profile: The company faces a significant number of risks, both explicit and implicit, which could impact its future performance and profitability.
• Limited Data: The provided data is limited, and further investigation is required to fully assess the company's risk profile.

Conclusion:

This analysis highlights several key risks that investors should carefully consider before investing in the company's IPO. The company's dependence on a few key customers, its high working capital requirements, its exposure to regulatory changes, and its lack of experience as a listed entity are among the most significant concerns. Investors should conduct thorough due diligence and consult with their financial advisors before making any investment decisions.