IPO Note : Knack Packaging Limited by GEPL Capital Ltd
Company Profile
Knack Packaging Ltd. is an integrated packaging solutions provider specializing in innovative, sustainable, and export-oriented Printed and Laminated Woven Polypropylene (PLWPP) bags used across industries such as food, agriculture, fertilizers, cement, chemicals, and building materials. The company held an estimated 10.1% share of India's flexible bulk PLWPP bag market in FY25 and serves leading domestic customers including Baba Agro Food, Drools Pet Food, KRBL, Ebro India, and DCM Shriram, along with global clients such as Cargill, Cristo S.A., and Repi Soap and Detergent PLC across 68 countries. Exports are a key growth driver, with the United States, Mexico, and South Africa contributing 35.19% of total export revenue. Backed by an in-house printing facility offering end-to-end design and cylinder development, the company has developed over 73,000 printing cylinders, manages 13,379 SKUs, operates a 92,065 sq. ft. warehouse, and serves more than 1,950 customers worldwide. As of FY26, Knack Packaging had a workforce of 1,834 employees, including contractual workers.
GEPL’s Insights & Investment Thesis:
* Knack Packaging Ltd holds approximately 10.1% share of India's flexible bulk PLWPP bag market in FY25 and serves leading domestic customers including Baba Agro Food, Drools Pet Food, KRBL, Ebro India, and DCM Shriram.
* The company will be investing to set up new manufacturing facility at Borisana, which should expand production capacity and support growing demand for highvalue packaging products such as pinch bottom bags.
* Based on the FY27 earnings, relative to the company's paid-up capital, the issue is priced at a P/E ratio of 19x. The issue is fairly valued compared to its peers, expansion of capacity, ramp-up of Unit-4, higher share of value-added products, and export traction. Therefore, we recommend a “Subscribe” rating for the issue
Business Highlights & Services
Knack Packaging has built a technology-enabled and highly integrated manufacturing platform that strengthens operational efficiency, cost competitiveness, and customer retention. Its proprietary Knack Galaxy platform, integrated with Microsoft Dynamics 365 CRM and SAP S/4 HANA, provides real-time visibility across procurement, production, inventory, logistics, and customer orders, enabling faster decision-making, optimized resource utilization, and reduced operational disruptions. The company's disciplined procurement strategy, buffer inventory, dedicated production lines, and preventive maintenance practices enhance production stability, improve delivery reliability, and mitigate raw material price volatility. Additionally, its advanced engineering capabilities, in-house ink kitchen, spectrophotometer-based colour matching, and ability to manufacture highly customized, technically complex PLWPP packaging solutions with consistent quality create strong customer stickiness and support premium positioning. Continuous employee training further strengthens execution capabilities, positioning Knack Packaging to efficiently scale operations, improve margins, and capitalize on rising demand for value-added packaging solutions.
Knack Packaging has established a high-entry-barrier, value-added packaging business supported by integrated design, manufacturing, and global distribution capabilities. The company provides end-to-end packaging solutions—from product design, artwork development, cylinder support, and technical consultation to final manufacturing—creating deep customer engagement and reducing switching costs.
This has translated into a strong customer retention rate of 88.3% in FY26, reflecting long-standing relationships with marquee domestic and global customers across food, pet food, fertilizers, and FMCG segments. With 56.3% of FY26 revenue generated from exports across multiple geographies and a diversified customer portfolio with no material dependence on any single customer or industry, the company enjoys a resilient revenue mix and lower concentration risk. Furthermore, the specialized PLWPP packaging industry is characterized by significant entry barriers, including high capital intensity, complex manufacturing processes, specialized printing capabilities, ERP-driven operations, stringent regulatory requirements, and the need for skilled manpower. Knack Packaging's vertically integrated manufacturing platform, technical expertise, and established global customer relationships position it to sustain its competitive advantage, support premium product offerings, and drive long-term profitable growth.
Knack Packaging is well-positioned to capitalize on the growing global demand for value-added packaging through strategic capacity expansion, product innovation, and international market penetration. The company operates a vertically integrated manufacturing platform with 43,300 MTPA installed capacity and 81.6% utilization in FY26, indicating room for near-term growth while supporting operational efficiencies. To address rising demand, the company plans to establish a new manufacturing facility, enhancing capacity for high-value packaging formats such as pinch-bottom and block-bottom bags, improving delivery capabilities, and enabling the commercialization of new products without operational bottlenecks. Additionally, Knack is expanding its portfolio with next-generation packaging solutions, including PLPE pinch-bottom, zipper, easy-carry, corner-seal, and easy-open bags, while increasing its presence in the >50kg PLWPP bag segment. Backed by a strategic partnership with Cargill, exports to over 71 countries, and exposure to high-growth end markets such as pet food, pulses, spices, and rice, the company is well placed to deliver sustainable volume growth, strengthen its competitive positioning, and drive long-term earnings expansion.
Knack Packaging is leveraging the structural shift toward durable and recyclable PLWPP packaging to strengthen its long-term growth prospects while enhancing operational efficiency. Compared with paper bags, PLWPP bags offer superior durability, reusability, lower transportation emissions, and improved recyclability, positioning the company to benefit from increasing customer preference for costeffective and sustainable packaging solutions. In parallel, the company is adopting solar energy across its manufacturing operations, including its upcoming facility, to reduce power costs, improve energy efficiency, and strengthen its ESG profile. Additionally, its waste-tovalue initiative, which converts production scrap into commercially usable materials, supports circular economy practices, reduces material wastage, and creates incremental revenue opportunities. These sustainability-driven initiatives are expected to improve cost competitiveness, enhance margins, and reinforce Knack Packaging's positioning in the evolving sustainable packaging market.
Knack Packaging is strategically positioned to capitalize on the expanding global PLWPP packaging market, which is projected to grow at a 5.0% CAGR through CY29, by broadening its product portfolio, expanding exports, and investing in next-generation manufacturing technologies. The company is targeting high-growth applications such as premium fertilizers, building materials, chemicals, seeds, charcoal, and shopping bags, while leveraging the structural shift from multiwall paper bags to value-added PLWPP packaging. With exports contributing 56.3% of FY26 revenue, a strategic partnership with Cargill, and the newly operational Sayem Knack joint venture with SACOS Y Empaques Internacionales to strengthen its presence in Latin America and the U.S., the company is well positioned to benefit from the global China+1 sourcing trend and diversify its international revenue base. Simultaneously, Knack Packaging is enhancing manufacturing efficiency through AI, machine learning, MES, SCADA, and Industry 4.0 technologies, enabling predictive maintenance, real-time production monitoring, optimized inventory management, and improved quality control. These strategic initiatives are expected to enhance operational scalability, strengthen global competitiveness, and support sustainable long-term revenue and margin growth.
SEBI Registration number is INH000000081.
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