IPO Note : Knack Packaging Ltd by Geojit Investments Ltd
Scalable Packaging Solutions with Global Reach
Knack Packaging Ltd., incorporated in 2013, is an integrated packaging solutions provider engaged in the manufacturing of Printed and Laminated Woven Polypropylene (PLWPP) bags, including pinch bottom, gusset, block bottom, and retail variants. Its products cater to diverse industries such as food, agriculture, fertilizers, cement, and chemicals. The company offers in-house printing and design capabilities, supporting customization and brand visibility. As of FY2025, it held an estimated 10% share of the Indian flexible bulk PLWPP bag market and served customers across 68 countries. With over 73,000 printing cylinders, 13,379 SKUs, and established warehousing infrastructure, it has developed a diversified customer base and consistent production capabilities
* The Indian flexible plastic packaging market grew ~5% CAGR from FY23 to FY25, reaching ?2,053bn, driven by the rise in FMCG consumption, ecommerce, and changing consumer lifestyles. (Source: Technopak Analysis).
* Knack reported an 8% revenue CAGR over FY24–26, reaching ?823cr, driven by volume-led growth from capacity expansion and a strong export share while margins improved by 370bps to 19% in FY26 due to better operating leverage and improved product mix.
* Adj. PAT grew at a CAGR of 26%, reaching ?93cr in FY26 from ?46cr in FY23, as result of better operating leverage and improved margins from better product mix.
* The company operates four manufacturing facilities in Gujarat, with an effective production capacity of 43,300 MT, indicating a strong and wellestablished operational infrastructure with a plan for a new facility which will boost revenue further.
* As of FY26, the company has strong return ratios, with ROE of 36% and ROCE of 27%, backed by a total asset turnover of 1.6x, indicating efficient utilization of its asset base.
* Exports accounted for 56% of total revenue in FY26, with the USA alone contributing 24%, highlighting the company’s strong presence and access to a significantly larger international market.
* At the upper price band of ?170, Knack Packaging is valued at ~22.4x FY26 P/ E, which appears reasonable in light of its strong growth trajectory, diversified end-user base, and established presence in both domestic and international markets. The company’s integrated operations, expanding capacity, and increasing share of value-added products further strengthen its growth visibility. Considering its solid financial performance, healthy return ratios, and favorable long-term prospects, we recommend a “Subscribe” rating for investors with a medium- to long-term investment horizon.
Purpose of IPO
The offer consists of Fresh Issue of Rs 380cr and Offer for Sale (OFS) of Rs60cr. The purpose of the issue is i) Partial funding of capital expenditure towards setting up of new manufacturing facility at Borisana situated at Kadi, Mehsana, Gujarat (Rs 320cr) and ii) general corporate purposes. Key Risks
• Supplier concentration risk: Top five suppliers drive 73% of raw material purchases in FY26, posing operational risk without long-term agreements.
• Raw material price volatility: Key raw materials such as polypropylene granules, BOPP films, and LDPE granules are largely derived from crude oil; therefore, fluctuations in crude oil prices can increase input costs and impact margins.
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