Veegaland Developers Limited

Customer payment delays and cancellations can pressure liquidity

Construction is partly funded by milestone-linked customer payments. Trade receivables reached ₹4,494.89 lakhs or 36.20% of revenue at September 30, 2025. Higher cancellations, delayed instalments or defaults can raise working-capital needs and finance costs.

Collections · material · p.64

Competition in residential real estate is intense and fragmented

Competition for land, customers, contractors and experienced staff can raise costs, reduce pricing power and force higher marketing expenditure. Larger or better-capitalised developers can exert additional pressure.

Competition · material · p.67

Issue-funded project and land costs rely on management estimates

The proposed use of Net Proceeds for project construction and land acquisition is based on management estimates, quotations and work orders. It has not been independently appraised by a bank or financial institution, and cost escalation or revised approvals can increase funding requirements.

Cost estimation · material · p.58

Construction input-cost inflation and price volatility

Land, materials, labour and other construction inputs can rise after project pricing and commitments have been established. The Company does not have long-term fixed-price arrangements for a substantial portion of construction materials and services, creating direct margin and execution exposure.

Cost inflation · material · p.47

Housing demand depends on availability and affordability of finance

Homebuyer demand can weaken if mortgage rates rise, lenders tighten underwriting, taxation or stamp duty increases, or affordability deteriorates. This can reduce bookings and extend sales cycles.

Demand and interest rates · material · p.49

Financial performance and return ratios fluctuate with project cycles

Revenue, profitability and return ratios vary materially with construction progress, revenue recognition and project mix. EBITDA margin moved from 22.00% in Fiscal 2023 to 14.59% in Fiscal 2024, 17.21% in Fiscal 2025 and 15.12% in the six months ended September 30, 2025.

Earnings volatility · material · p.47

Dependence on independent contractors and specialists

Construction relies on independent contractors and specialist service providers. Non-performance, labour shortages, quality failures or contractor disputes can delay projects and raise costs while the Company remains responsible to customers and regulators.

Execution and counterparty · material · p.46

Negative Cash Flows

Negative cash flows from operating activities reported as (1,774.51) Lakhs for the six-month period ended September 30, 2025.

Financial · material

Interest-rate fluctuations can reduce profitability

Higher rates can increase borrowing costs and simultaneously reduce homebuyer affordability, creating pressure on both the cost and demand sides of the business.

Financing and demand · material · p.72

Project information and future funding estimates are assumption-driven

Saleable area, timelines, configurations, funding requirements and utilisation estimates for ongoing and upcoming projects depend on assumptions and can change with approvals, design revisions, funding and market conditions.

Forecast uncertainty · material · p.61

Entire business concentrated in Kerala

All Completed, Ongoing and Upcoming Projects are located in Kerala. A Kerala-specific downturn, regulatory change, land-price shock, flood, severe monsoon or weakening buyer demand can directly hit the entire operating portfolio with no geographic diversification to absorb the impact.

Geographic concentration · material · p.43

Related-party transactions create conflict-of-interest risk

The Company historically relied materially on promoter-related financing and entered into transactions with related entities, including a ₹1,758.12 lakhs purchase of land and building from K Chittilappilly Foundation in the six months ended September 30, 2025. Such transactions may create conflicts and may not always be in minority shareholders' interests.

Governance · material · p.49

Promoters will retain substantial control after the Issue

The Promoters and Promoter Group will continue to hold a substantial ownership position after the Fresh Issue and will retain significant influence over shareholder decisions and strategic matters.

Governance and ownership · material · p.65

Funding requirements have not been independently appraised

The project and land-funding requirements proposed to be met from Net Proceeds were not appraised by any bank, financial institution or other independent agency. Management therefore has broad responsibility for the estimates and deployment.

IPO proceeds and governance · material · p.68

Dependence on Promoter and senior personnel

Strategic direction and execution depend materially on the Promoter, Directors, KMP and Senior Management. The Company has no key-man insurance covering these individuals, so an unexpected departure can disrupt decisions and project execution.

Key-person · material · p.59

Joint development arrangements expose the Company to landowner and title risk

Under JDAs, title remains with landowners and the Company depends on their cooperation. Defective title, encumbrances, disputes, non-performance or termination can delay projects, cause litigation or lead to loss of development rights.

Land and counterparty · material · p.57

Growth depends on continuous access to suitable land

Land is the core raw material. Failure to identify parcels with clean title at viable prices in suitable micro-markets would constrain the future project pipeline and revenue growth.

Land pipeline · material · p.65

Capital-intensive business and substantial working-capital needs

Land and construction spending precede customer cash generation. Failure to secure adequate working capital can delay construction, restrict land acquisition and force additional debt or equity funding.

Liquidity · material · p.48

Revenue is materially dependent on premium and higher-end residential demand

Premium and ultra-premium segments contributed 90.41% of revenue from operations in the six months ended September 30, 2025 and 93.57% in Fiscal 2025. A slowdown in higher-income buyer demand would therefore have a disproportionate effect.

Product concentration · material · p.66

Execution and completion risk across ongoing and upcoming projects

Nine Ongoing Projects and four Upcoming Projects are the primary source of future revenue and cash flow. Delays, cost overruns or inability to complete them on schedule can postpone collections and revenue recognition and erode margins.

Project execution · material · p.44

Dependence on statutory and regulatory approvals

Projects require multiple approvals that must be obtained, maintained and renewed. Failure or delay in receiving approvals can stop construction or sales, force design changes and push out project cash flows.

Regulatory · material · p.48

Supplier concentration has risen materially

The top supplier represented 25.08% and the top ten suppliers 74.80% of construction materials, labour and direct expense in the six-month period ended September 30, 2025. Disruption, repricing or underperformance among large suppliers can materially affect project schedules and costs.

Supply chain · material · p.425

The Company states that as of the DRHP there were no unusual or infrequent events or transactions, including unusual tre

The Company states that as of the DRHP there were no unusual or infrequent events or transactions, including unusual trends arising from business activity, unusual income items, changes in accounting policies or discretionary reductions of expenses.

accounting · moderate · p.423

Cash conversion is the most important financial concern. Operating cash flow was negative ₹4,399.56 lakhs in Fiscal 2025

Cash conversion is the most important financial concern. Operating cash flow was negative ₹4,399.56 lakhs in Fiscal 2025 and negative ₹1,774.51 lakhs in the six months ended September 30, 2025 despite positive PAT, reflecting significant inventory and receivable funding requirements.

analysis · moderate · p.60

The entire project portfolio is concentrated in Kerala, with Kochi accounting for most completed and ongoing saleable ar

The entire project portfolio is concentrated in Kerala, with Kochi accounting for most completed and ongoing saleable area. A local property-cycle, regulatory or climatic shock therefore affects virtually the whole business simultaneously.

analysis · moderate · p.43

Gross margin has declined from 30.51% in Fiscal 2023 to 27.56% in Fiscal 2025 and 27.42% in the six months ended Septemb

Gross margin has declined from 30.51% in Fiscal 2023 to 27.56% in Fiscal 2025 and 27.42% in the six months ended September 30, 2025, while EBITDA margin fell from 22.00% in Fiscal 2023 to 15.12% in the latest six-month period.

analysis · moderate · p.401

Trade receivables rose sharply to ₹4,494.89 lakhs, equal to 36.20% of revenue from operations at September 30, 2025, com

Trade receivables rose sharply to ₹4,494.89 lakhs, equal to 36.20% of revenue from operations at September 30, 2025, compared with 14.24% in Fiscal 2025, increasing collection and working-capital sensitivity.

analysis · moderate · p.64

Supplier concentration has increased materially: the top supplier represented 25.08% and the top ten 74.80% of construct

Supplier concentration has increased materially: the top supplier represented 25.08% and the top ten 74.80% of construction materials, labour and direct expense in the latest six-month period.

analysis · moderate · p.425

The apparent improvement in leverage is substantially linked to a ₹17,500.00 lakhs rights equity infusion immediately be

The apparent improvement in leverage is substantially linked to a ₹17,500.00 lakhs rights equity infusion immediately before the IPO process. Financing cash flow in the six months ended September 30, 2025 included ₹17,500.00 lakhs of equity proceeds and ₹12,839.79 lakhs of borrowing repayments.

analysis · moderate · p.309

The Company's identified project programme has total estimated cost of ₹80,619.30 lakhs, while only ₹11,159.56 lakhs is

The Company's identified project programme has total estimated cost of ₹80,619.30 lakhs, while only ₹11,159.56 lakhs is proposed to be funded from Net Proceeds. Execution therefore continues to require substantial project collections, internal resources or other funding.

analysis · moderate · p.136

Related-party activity has historically been economically significant, including promoter loans and interest and a ₹1,75

Related-party activity has historically been economically significant, including promoter loans and interest and a ₹1,758.12 lakhs related-party land and building purchase in the latest six-month period.

analysis · moderate · p.54

The statutory auditor included an Emphasis of Matter in the November 20, 2025 report on the Special Purpose Interim Fina

The statutory auditor included an Emphasis of Matter in the November 20, 2025 report on the Special Purpose Interim Financial Statements for the six months ended September 30, 2025 because comparative financial information was not included; the auditor stated that only a complete set with comparative information can provide a fair presentation. The audit opinion was not modified in respect of this matter.

audit · moderate · p.415

The statutory auditor also included an Emphasis of Matter in the November 20, 2025 report on the Special Purpose Compara

The statutory auditor also included an Emphasis of Matter in the November 20, 2025 report on the Special Purpose Comparative Ind AS Financial Statements for Fiscal 2023 concerning their special-purpose basis of preparation and absence of comparative financial information.

audit · moderate · p.415

Related Party Transactions

Company has entered into related party transactions.

Business · moderate

Regulatory Approvals

Demand for residential projects is dependent on availability and affordability of housing finance.

Business · moderate

Dependence on Contractors

Dependence on independent contractors and specialists for construction and project execution.

Business · moderate

Historical statutory corporate-compliance delays

The DRHP identifies certain instances of delays and non-compliances in statutory corporate filings. Recurrence after listing could result in penalties, regulatory action and weaknesses in compliance controls.

Compliance · moderate · p.70

Financing arrangements contain restrictive covenants

Borrowing arrangements contain covenants that can limit operational and financial flexibility. Breach may trigger additional lender rights or repayment obligations.

Financing · moderate · p.72

Expansion beyond existing geographies may be difficult

Entering new locations requires land sourcing, local regulatory knowledge, contractors, brand recognition and demand assessment. The Company's operating history is concentrated within Kerala.

Growth execution · moderate · p.67

Objects of the Issue may not be achieved on schedule

There is no assurance that planned construction, land acquisition and other uses of Net Proceeds will occur within the stated timeframe. Delayed deployment can leave capital idle, force changes in use and defer the expected expansion of the project pipeline.

IPO proceeds deployment · moderate · p.48

Contingent liabilities may crystallise

Contingent liabilities were ₹87.95 lakhs at September 30, 2025, comprising provident-fund and income-tax matters. An adverse outcome can require cash payments, interest and penalties.

Legal and financial · moderate · p.60

Outstanding litigation involving Company, Directors and Promoters

The Company, a Director and the Promoter are involved in pending tax, civil and criminal proceedings. Adverse outcomes may require provisions, cash payments or reputational costs even where amounts are currently unquantifiable.

Litigation · moderate · p.62

Digital transformation and systems migration risk

The Company is undertaking digital transformation and migration of core systems. Implementation failures, disruption, integration problems or data issues can affect operational processes and controls.

Technology and operations · moderate · p.65