Mumbai, Aug 11 (IANS) Dhoot Transmission Ltd has opened its initial public offering (IPO) with the company highlighting several risks such as customer concentration, cybersecurity and others in its red herring prospectus (RHP).
According to the RHP, the company's dependence on a handful of customers remains high. Its top five customers accounted for 71.56 per cent of total operating revenue in FY26, compared with 71.18 per cent in FY25 and 66.17 per cent in FY24.
The company said it does not have long-term supply agreements with these customers and supplies products based on the requirements of original equipment manufacturers (OEMs).
Customers also retain the right to terminate contracts, creating a potential risk to business and revenue if orders are curtailed or discontinued.
Dhoot Transmission also disclosed that it was subjected to a cyberattack during FY25. According to the company, the incident resulted in the leakage of major data, including confidential information related to product designs and pricing.
While the company said the incident prompted management to strengthen its systems and increase investments in cybersecurity, it cautioned that there can be no assurance that such measures would completely prevent future cyber incidents.
The company further identified related-party transactions as a significant risk. These transactions include product sales, rent, commissions, purchases of fixed assets and reimbursement of expenses.
Dhoot Transmission said shareholders had approved a related-party transaction in FY24 involving the sale of current assets worth about Rs 57.42 crore and immovable assets, including land and buildings, worth about Rs 23.75 crore to its subsidiary, Dhoot Auto-Components Pvt Ltd.
From time to time, the company’s board has approved higher annual transaction limits with key associate entities to support intra-group supply and logistics requirements.
Moreover, the company cannot assure shareholders that the terms of such related-party transactions will always be favourable to the company.
Additionally, the company’s public issue opened for retail investors from August 10 to August 12.
The price band has been fixed at Rs 829-871 per share with a lot size of 17 shares.
--IANS
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