Pakka Limited has received a significant boost for its Jagriti Project as the Uttar Pradesh government's Evaluation Committee approves and recommends fiscal incentives worth Rs. 224.47 crores. This development marks a crucial step forward for the company's investment plans in the state.

Key Highlights

• The Evaluation Committee of Invest UP has approved and recommended fiscal incentives of Rs. 224.47 crores for Pakka Limited's Jagriti Project.
• The incentives fall under the Uttar Pradesh Industrial Investment and Employment Promotion Policy, 2022.
• Pakka Limited applied for these incentives on July 23.
• The Evaluation Committee has recommended the proposal to the Uttar Pradesh Government for issuing a Letter of Comfort (LOC).
• Final approval is subject to the state cabinet's decision.
• If approved, the fiscal incentives will be distributed over 15 years from the start of commercial production.

Details of the Approval Process

Pakka Limited, in a filing to the stock exchanges on September 16, disclosed that it had applied for various fiscal incentives under the Uttar Pradesh Industrial Investment and Employment Promotion Policy, 2022. The application, submitted on July 23, was for investments made or to be made in the company's 'Jagriti Project'.

The Evaluation Committee of Invest UP, after reviewing the application, has approved and recommended the proposal to the Uttar Pradesh Government. This recommendation is a crucial step towards the issuance of a Letter of Comfort (LOC) for the investments related to the Jagriti Project.

Implications and Next Steps

While this approval and recommendation from the Evaluation Committee is a positive development for Pakka Limited, it's important to note that the fiscal incentives are not yet finalized. The proposal now awaits the approval of the Uttar Pradesh Government's cabinet.

If approved by the state cabinet, these fiscal incentives will provide substantial support to Pakka Limited's Jagriti Project over an extended period. The company stands to benefit from Rs. 224.47 crores in incentives, distributed over 15 years from the date of commercial production.

This development aligns with Uttar Pradesh's efforts to promote industrial investment and employment in the state through its 2022 policy initiative. For Pakka Limited, these incentives could significantly enhance the financial viability and long-term prospects of the Jagriti Project.

Investors and stakeholders will be keenly watching for the final approval from the state cabinet, which will determine the ultimate impact of these fiscal incentives on Pakka Limited's operations and financial outlook in Uttar Pradesh.

Pakka Limited , a key player in the sustainable packaging industry, recently held an investor conference call to discuss its financial performance for the first quarter ended June 30, 2024, and outline its ambitious growth plans.

Q1 FY25 Financial Highlights

Pakka Limited reported a modest increase in revenue for Q1 FY25:

The company's bottom line showed improvement, rising to ₹15.88 crores from ₹15.64 crores in the previous quarter.

Compostables Division Faces Challenges

The compostables division experienced some headwinds:

• Revenue declined to ₹14.51 crores from ₹14.67 crores
• Pricing pressures due to increased competition
• Improved volumes, despite revenue decline

Strategic Expansion: Jagriti Project

Pakka Limited announced significant progress on its Jagriti project:

• Successfully raised ₹244 crores through equity funding
• Issued 54 lakh preference shares and 36 lakh warrants
• Total project cost: ₹700 crores
• Expected commissioning: End of 2025
• Target: Flexible packaging capabilities with 30,000+ tons capacity

International Expansion: Guatemala Project

The company is also working on an international expansion project in Guatemala:

• Total investment required: $340 million
• Equity funding of $140 million being raised from external investors

Future Outlook

Pakka Limited has set ambitious goals for the future:

• Targeting $1 billion revenue by 2030
• Focus on expansion projects and new product innovations
• New product lines include delivery containers, cutlery, and beverage cups

The company's strategic initiatives, including the Jagriti project and the Guatemala expansion, are expected to play crucial roles in achieving its long-term revenue target. As Pakka Limited continues to innovate and expand its product offerings in the sustainable packaging sector, it aims to capitalize on the growing demand for eco-friendly solutions in the global market.