Pranav Constructions IPO: Real estate firm flags negative cash flow, project delays, other key risks
New Delhi, Sep 5
Real estate developer Pranav Constructions Ltd -- whose initial public offering is scheduled to open for subscription on September 7 -- has identified project delays, negative cash flows and a legal dispute involving its promoter among key risk factors for prospective investors, according to its Red Herring Prospectus filed with market regulator SEBI.
The company said two of its redevelopment projects, Nirmal Bhavan CHSL and Rajnigandha CHSL, have witnessed significant and prolonged delays due to legal disputes, regulatory hurdles and procedural shortcomings.
However, the real estate firm was awarded the Nirmal Bhavan project in 2016 and the Rajnigandha project in 2018.
According to the RHP, pending approvals have already delayed execution timelines and any further setbacks could affect the viability of the projects.
The company added that it has limited control over the timing of judicial proceedings and regulatory approvals which makes it difficult to predict the duration of such delays.
Apart from that, the IPO document also highlighted the company's negative operating cash flow position that stood at negative Rs 41.19 crore in FY26 and negative Rs 92.60 crore in FY25, compared with a positive Rs 5.46 crore in FY24.
In addition, the company disclosed ongoing litigation involving its principal promoter, Pranav Kiran Ashar.
According to the RHP, Vaisshali Pranav Ashar filed a case against him on June 5, 2024, before the Metropolitan Magistrate Court in Mumbai under provisions of the Protection of Women from Domestic Violence Act, 2005.
The application seeks protection, residence and custody orders along with compensation and monetary relief amounting to Rs 10.21 crore. The matter remains pending before the court.
Pranav Constructions also said strained personal relations between its promoters have limited its ability to obtain information related to Vaisshali Pranav Ashar and associated entities, disclosures that are required under SEBI's Issue of Capital and Disclosure Requirements (ICDR) regulations.
— IANS
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