RK Swamy IPO: Here are 10 key risks from the RHP you should know before subscribing

RK Swamy IPO: The issue has opened for subscription today (Monday, March 4), and will close on Wednesday, March 6. The price band has been fixed in the range of ₹270 to ₹288 per equity share of the face value of ₹5. RK Swamy IPO lot size is 50 equity shares and in multiples of 50 equity shares thereafter.

Here are 10 key risks from the RHP you should know before subscribing

1. RK Swamy Ltd business is concentrated around key clients, which account for a significant amount of our revenue. If the company fails to retain these clients, or diversify its client base or if its key clients reduce their marketing budgets, RK Swamy business, revenue growth, results of operations, cash flows and financial condition may be materially and adversely affected.

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2. RK Swamy Ltd revenues are highly dependent on certain key industries. Any decrease in demand for marketing services in these industry verticals could reduce its revenues and adversely affect the business, financial condition and results of operations

3. Digital marketing forms a substantial part of RK Swamy Ltd offerings and hence is the major source of income. Any changes in trend, decrease in digital advertisement-spend by its clients could have a material adverse effect on its business, revenue growth and results of operations and financial condition.

4. If RK Swamy Ltd is unable to consistently upgrade its data analytics capabilities in line with the latest technologies or if its data-based predictions are wrong because its technology hasn’t evolved enough or due to any other reasons, it may adversely affect its quality of services and clients’ satisfaction.

The cost of implementing any new technologies could adversely affect its business and financial condition.

5. RK Swamy clients may delay or default on their payments. This could adversely affect its business and financial condition.

6. Certain services RK Swamy ltd offers are dependent on the availability of space or sites for publishing of ads, other media purchases and production costs. Any non availability or significant increase in the prices of such ad space or sites or other such purchases may adversely affect its business, results of operations and financial condition

7. RK Swamy Ltd inability to adequately adapt to competitive pricing models to retain existing clients and attract prospective clients may have an adverse impact on its business, financial condition and results of operations

8. RK Swamy Ltd depend on its relationships with various newspapers, media channels, advertising platforms and creative talent to for its advertising and marketing offerings. Any strain in such relationships, may adversely affect its business, operational expenses and results of operations.

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9. RK Swamy Ltd collect data from third parties like publishers, web browsing platforms or other software developers, and hence would be affected by availability of customer consent which could potentially result in a decrease in client satisfaction, a decline in its competitive positioning, and may result in a reduction in its revenue and profitability.

10. RK Swamy Ltd business depends on its ability to deliver and maintain the quality of content for its clients and publishers. If company is unable to consistently deliver, maintain its standards and achieve the resulted oriented objectives, it may adversely affect its reputation and customer satisfaction