GSP Crop Science Ltd IPO

Strengths

Risks

• The company requires certain approvals and licenses, including certain registrations from the Central Insecticides Board and Registration Committee ("CIBRC") for its products. Regulations governing the production, sale, and use of agrochemicals have become increasingly stringent. Any failures to successfully obtain such registrations or renew or maintain the company's statutory and regulatory permits and approvals required to operate its business and manufacturing facilities would adversely affect the company's operations, results of operations and financial condition.
• The company is subject to stringent technical specifications and quality requirements in relation to the company's Technicals and Formulations. The company's failures to comply with the quality standards and technical specifications may lead to loss of business from such customers and could negatively impact its reputation, which would have an adverse impact on the company's business prospects and results of operations.
• The company is requireds to comply with the applicable regulations of the international geographies where the company undertakes business as well as obtain registrations from foreign governmental authorities through its customers/or directly from foreign regulatory authorities to enable sale of the company's products in such international jurisdictions. Further, the company's International Business is subject to regulatory risks that could adversely affect its business and results of operations.
• The company's cost of materials consumed constituted a majority of the total expenses incurred in the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023. Any further increase in the company's costs of materials consumed or the company's inability to reasonably offset its costs with the prices of the company's products may have an adverse impact on the company's profitability.
• The company depends on a few suppliers for supply of raw materials. Any failures to procure such raw materials from these suppliers may have an adverse impact on the company's manufacturing operations and results of operations.
• The company is dependents on China for imports of the company's raw materials, with imports of raw materials from China constituting 42.08%, 37.99%, 35.28%, and 31.85% of its purchases for continuing operations in the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023, respectively. Any interruption in imports, specifically from China, may have an adverse impact on the company's manufacturing operations and results of operations.
• The company derives 57.37%, 62.03%, 60.81%, and 58.78% of the company's revenue from continuing operations for the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023, respectively from its customers situated in Gujarat, Maharashtra, Andhra Pradesh, Rajasthan and Karnataka. Any instability in the business or financial performance of the company's customers situated in these states could materially affect its business, financial condition, and results of operations.
• The company typicallys does not enter into long-term agreements with its customers. Any inability to retain the company's customers or find replacement customers for its products may have a material adverse impact on the company's profitability, financial condition and results of operations.
• The company is dependents on the company's distribution network for the distribution of Formulations in the company's B-to-C Domestic Business. Any inability to expand or effectively manage or any disruption in the company's distribution network will adversely affect its business and results of operations.
• The company's business is sensitive to seasonal vagaries and adverse weather conditions which affect the agrochemical industry. Seasonal variations and unfavourable local and global weather patterns may have an adverse effect on the company's business, results of operations and financial condition.
• Any inability to protect its process and product patents or any other intellectual property, or any infringement claims in relation to intellectual property rights against the company and failures to keep the company's technical knowledge confidential could erode its competitive advantage and could have a material adverse effect on the company.
• The company typicallys experience high sales returns in relation to the company's products, with sales returns accounting for 8.26%, 9.35%, 10.23%, and 14.37% of the company's gross revenue from continuing operations in the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023, respectively. Such sales returns could have an adverse impact on the company's business prospects and results of operations.
• There are factual inaccuracies in one of the company's corporate records.
• A portion of the company's revenues and expenses are denominated in foreign currencies. As a result, the company is exposed to foreign currency exchange risks and regulatory changes in foreign exchange management which may adversely impact its results of operations.
• Industrial disasters on account of hazardous materials could adversely impact its business.
• Significant portion of the company's revenue is derived from sale of Formulations. Sale of Formulations constituted 71.81%, 70.56%, 65.58%, and 59.07% of its sale of products from continuing operations for the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023, respectively. Any decline in the sale of Formulations could adversely impact the company's business.
• Significant portion of the company's revenue is derived from sale of generic products. Revenue from sale of generic products constituted 82.90%, 82.58%, 86.13%, and 94.17% of the company's sale of products from continuing operations for the six months ended September 30, 2025, and Fiscals 2025, 2024, and 2023, respectively. Any decline in the sale of generic products, could adversely impact its business, financial condition and result of operations.
• Significant portion of the company's revenue is derived from the sale of Insecticides. Revenue from sale of insecticides constituted 58.79%, 63.02%, 68.20%, and 62.67% of its sale of products from continuing operations for the six months ended September 30, 2025 and for Fiscals 2025, 2024, and 2023, respectively. Any decline in the sale of Insecticides, could adversely impact the company's business, financial condition and results of operations.
• The company discontinueds its plasticizers business in Fiscal 2024. Revenue from plasticizer business as a percentage of total revenue from continuing and discontinued operations during the six months ended September 30, 2025 and Fiscal 2025, Fiscal 2024, and Fiscal 2023, was Nil, 6.57%, 16.59%, and 16.38% respectively. Discontinuation of any major business workstream in the future may have an adverse impact on the company's business and operations.
• Significant portion of the company's revenue is derived from the sale of the company's top product, top five products and top ten products. Any decline in the sale of these products, could adversely impact its business, financial condition and results of operations.
• Certain outstanding criminal misbranding cases have been instituted against the Company and the company's Material Subsidiary under Section 29(1)(a) of the Insecticides Act, 1968. Any adverse outcome in these proceedings may have an adverse effect on our business prospects, financial condition, results of operations and reputation.
• Information relating to the historical installed capacities of the company's Manufacturing Facilities included in this Red Herring Prospectus may be based on certain assumptions and estimates by the independent chartered engineer verifying such information and future production and capacity utilisation may vary.
• Two of the company's Promoters does not have adequate experience in the company's line of business and have not actively participated in the business activities the company undertakes, which may have an adverse impact on the management and operations of the Company.
• Any downgrading of the company's credit rating by a credit rating agency may increase interest rates for its future borrowings, which would increase the company's cost of borrowings, and adversely affect its ability to borrow on a competitive basis.
• The company is requireds to offer discounts and rebates to distributors within B-to-C Domestic Business due to intense competition, thereby risking margin erosion and long-term profitability.
• The increasing usage and adaptation of organic farming and bio-pesticides could have an adverse impact on the company's business.
• The company is dependents on third party transportation and logistics service providers for certain operations including transportation of raw materials, distribution and delivery of the company's products and hazardous waste management. Any defect, damage or destruction caused to the company's products could adversely affect its business, financial condition and results of operations.
• Any unscheduled, unplanned or prolonged disruption of the company's manufacturing operations, such as, strikes and lockouts, could materially and adversely affect its business, financial condition and results of operations.
• The company's inability to effectively manage its growth or to successfully implement its business plan and growth could have an adverse effect on the company's business, results of operations and financial condition.
• The company's revenue contribution from International Business as a percentage of its revenue from continuing operations declined from 14.28% in Fiscal 2023 to 10.78% in Fiscal 2024.
• An inability to protect or further strengthen and enhance the company's brand and business reputation could adversely affect its business prospects and financial performance. Negative publicity may adversely affect the company's reputation and business.
• The comany may not be able to derives the desired benefits from its R&D efforts.
• Shortage or unavailability of electricity or fuel could affect its manufacturing operations and may have an adverse effect on the company's business, results of operations and financial condition.
• The company is requireds to comply with certain restrictive covenants under its financing agreements. Any non-compliance may lead to, amongst others, accelerated repayment schedule, enforcement of security, and suspension of further drawdowns, which may adversely affect the company's business operations and financial performance.
• The company's dhav Facility and Samba Facility have experienced low capacity utilization in the six months ended September 30, 2025 and Fiscal 2025, 2024 and 2023.
• The company is required to comply with various government regulations, including obtaining licenses, permits, approvals and consents under certain environmental laws for operating its Manufacturing Facilities. If the company is fails to obtain, maintain or renew its statutory and regulatory licenses, permits and approvals required to operate the company's business, results of operations and cash flows may be adversely affected.
• Certain challans for the forms filed by the company with the RoC, are not traceable. While the company has conducted a search with the RoC, in respect of the unavailability of such challans, the company cannot's assure you that such forms or records will be available at all or any time in the future.
• There are outstanding legal proceedings involving the Company, Promoters and Subsidiaries. Failures to defend these proceedings successfully may have an adverse effect on the company's business prospects, financial condition, results of operations and reputation.
• The company's Promoters have provided personal guarantees for financing facilities availed by the Company and may in the future provide additional guarantees and any failures or default by the Company to repay such facilities in accordance with the terms and conditions of the financing agreements could trigger repayment obligations, which may impact the ability to effectively service obligations as the company's Promoters, which may adversely impact its business and operations.
• The company's Promoters, Directors, KMPs and SMPs may have interests other than reimbursement of expenses incurred and normal remuneration or benefits. There can be no assurance that its Directors in the future will always act to resolve any conflicts of interest to the benefit and best interest of the Company.
• The success of the company's business depends substantially on the company's Promoters, Directors, Key Managerial Personnel and Senior Management Personnel and our permanent employees. The company's inability to retain them, or to recruit skilled technical personnel that are necessary for its business could adversely affect our business.
• The development of agrochemical products is a lengthy, complex, and costly process subject to various risks and uncertainties, including regulatory hurdles and uncertain R&D outcomes, which could adversely affect its business, financial condition, and results of operations.
• The expiry of the company's patents for certain agrochemical products could lead to increased competition, a decline in revenue, and necessitate significant supply chain adjustments, any of which could materially and adversely affect its business, financial condition, and results of operations.
• The company's failures to keep its proprietary knowledge confidential could erode the company's competitive advantage.
• The company typicallys does not enter into long-term agreements with its sub-contractors, which could have a material adverse effect on the company's business, results of operations and financial condition.
• The company has had instance of delays in payments of statutory dues by the Company. Any delays in payment of statutory dues may attract financial penalties from the respective government authorities and in turn may have an adverse impact on the company's financial condition and cash flows.
• Any adverse impact on the global or domestic agrochemical industry such as emergence of resistance in pests and weeds, decrease in efficacy of chemical-based pesticides, intense competition and strict regulations could have an adverse impact on the company's business.
• The agrochemical industry is characterized by intense competition as per the ICRA Report. The company's inability to compete effectively may adversely affect its business, cash flows, results of operations, financial condition, and may also lead to a lower market share or reduced operating margins.
• Increased awareness and concern about the negative impacts of agrochemicals on biodiversity, soil health and water quality could have an adverse impact on the company's business.
• Certain sections of this Red Herring Prospectus contain information from the ICRA Report which the company commissioneds and purchased, and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.
• The Company and the industry the company operates in is subject to certain threats and challenges. Materialization of any of these threats could result in increased costs, delays, or inability to sell its products, adversely affecting its business, financial condition, and results of operations.
• Certain of the company's Subsidiaries have incurred losses in the past and may do so in the future, which could have a material adverse effect on the company's business, prospects, financial condition, cash flows and results of operations.
• The company has not been able to obtain certain records of educational qualifications and past work experience of one of the company's Promoters and one of its Directors, and have relied on certificates and marksheets furnished by them for such details of their profile, included in this Red Herring Prospectus.
• Some of the company's Directors and Promoters may have interest in entities, which are in businesses similar to the company's and this may result in conflict of interest with the company. Further, certain of the company's Subsidiaries and the company's Group Companies are in the same line of business as the company, which may result in a conflict of interest.
• The company's insurance policies may not be adequate to cover all losses incurred in the company's business. An inability to maintain adequate insurance cover to protect the company from material adverse incidents in connection with its business may adversely affect the company's business, results of operations, financial condition and cash flows.
• Write-off of bad debts could result in the reduction of the company's profits and affect its cash flows.
• Inventory write-downs for finished goods may adversely affect its income statement by increasing cost of goods sold and reducing net income.
• The company has certain contingent liabilities which, if materialized, may adversely affect its financial condition.
• The company's arrangements with third-parties such as marketers engaged in business of marketing and selling various agrochemicals expose the company to certain risks.
• Failures in internal control systems could cause operational errors which may have an adverse impact on the company's profitability.
• The company has entered into related party transactions in the past and may continue to do so in the future. The terms of these related party transactions, while at arm's length, may be unfavourable to the company.
• The increasing adoption of non-chemical-based agricultural methods and genetically modified (GM) crop varieties may reduce the demand for its traditional agrochemical products and adversely affect the company's business, financial condition, and results of operations.
• Trade payables `not due' are almost equal to the total trade payables as per the Restated Consolidated Financial Information.
• The company incurs labour charges and employee benefit expenses, such as salaries, wages and bonus, staff welfare expenses and contribution to provident and other funds. In case the company faces an increase in labour charges or employee benefit expenses that the company is unable to pass on to the company's customers, the company may be prevented from maintaining the company's competitive advantage and the company's profitability may be impacted.
• The company's Statutory Auditors have included certain Emphasis of Matter paragraphs with respect to their audit reports. If such observations are included in future audit reports or examination reports, the trading price of the Equity Shares may be adversely affected.
• The objects of the Offer and proposed deployment of the Net Proceeds of the Offer have not been appraised by a bank or a financial institution. The deployment of funds is based on management estimates and as per the details mentioned in the section titled "Objects of the Offer". Any revision in the estimates may require the company to reschedule its expenditure and may have a bearing on the company's expected revenues and earnings. Further, if there are any delays or cost overruns, the company's business, financial condition and results of operations may be adversely affected.
• Variation in the utilisation of Net Proceeds would be subject to certain compliance requirements, including prior shareholders' approval. Any delay or inability in obtaining such shareholders' approval may adversely affect its business or operations.
• The company's Promoters hold 90.55% of the pre-Offer shareholding of the Company and will continue to retain a significant shareholding in the Company after the Offer, which will allow them to exercise influence over the company. Any substantial change in the company's Promoters' shareholding may have an impact on the trading price of the company's Equity Shares which could have an adverse effect on the company's business, financial condition, results of operations and cash flows.
• The company may be exposed to the risks of significant breaches of data security, and malfunctions or disruptions of information technology systems which may have an adverse effect on the company's business and results of operations.
• Employee misconduct or failures of the company's internal processes or procedures could harm the company by impairing its ability to attract and retain customers and subject the company to significant legal liability and reputational harm, which could adversely affect its reputation, business, results from operations, financial conditions and cash flows.
• The company may not be able to secure additional funding in the future. In the event the company is unable to obtain sufficient funding, it may delay the company's growth plans and have a material adverse effect on the company's business, cash flows and financial condition.
• The company may not achieve the benefits the company expects from future acquisitions and business partnerships, which may have an adverse effect on the company's profitability and ability to manage its business prospects.
• Certain non-GAAP financial measures and certain other statistical information relating to the company's operations and financial performance have been included in this Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable.
• An inability to develop or implement effective risk management frameworks could expose the company to unidentified risks or unanticipated levels of risk.
• The company's ability to pay dividends in the future will depend on the company's earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of its financing arrangements.
• Fluctuations in interest rates could adversely affect its results of operations.
• The company will not receive any proceeds from the Offer for Sale. The Promoter Selling Shareholders will receive the Net Proceeds from the Offer for Sale.
• Upon listing, the company may be subject to additional costs/unanticipated expenses arising from the obligations that a listed public company has to comply with, under the applicable regulatory framework in India.