Knack Packaging Limited made its stock market debut on BSE at ₹186 per share, against an issue price of ₹170 per share. The listing follows a successful initial public offering (IPO) that was subscribed 7.15 times, driven by strong interest from Non-Institutional Investors (NIIs) and Qualified Institutional Buyers (QIBs). The IPO aimed to raise ₹320 crore through a fresh issue to fund capital expenditure for a new manufacturing facility. The company reported a net profit of ₹92.72 crore in FY2026 and commands a 10.1% market share in the Indian flexible bulk PLWPP bags segment.

Subscription Details

The issue received a robust response across investor categories ahead of its listing. The following table summarizes the subscription levels across all investor categories:

Financial Performance and Growth Metrics

The company reported a revenue from operations of ₹823.43 crore in FY2026, with a Profit After Tax (PAT) margin of approximately 11.26%. The balance sheet reflects a strengthening equity base, reaching ₹308.19 crore in FY2026, while total assets stood at ₹595.25 crore. The company's Return on Equity (ROE) was approximately 30.08% in FY2026, while the debt-to-equity ratio improved to 0.93x.

Objects of the Issue and Capacity Expansion

The net proceeds from the IPO will be allocated towards setting up a new manufacturing facility at Borisana, Kadi, Mehsana, Gujarat. The company plans to invest ₹320 crore in capital expenditure to install a new packaging line with pinching machines. This expansion is intended to increase overall throughput, improve operational efficiency, and enhance product quality to meet rising domestic and export market demand. A portion of the net proceeds, not exceeding 25% of the gross proceeds, will be utilized for general corporate purposes, which may support business development initiatives, working capital requirements, debt repayment, and operational expenses.

Business Operations and Market Position

Knack Packaging Limited operates a vertically integrated manufacturing process with an effective installed capacity of 36,400 MT per annum as of March 31, 2025. The company specializes in Printed and Laminated Woven Polypropylene (PLWPP) bags and PLWPP Pinch Bottom bags, holding a pioneer status in India and Asia for introducing laser cut and easy-open features. Export sales constituted 56.06% of the total revenue in FY2025, with the United States market alone contributing 26.61% to total revenue. Key industry verticals served include food products, pet foods, agriculture, and chemicals.

Key Risks and Factors

While the company exhibits strong growth fundamentals, it faces several risk factors that investors must consider. There is a high dependence on key suppliers, with the top 10 suppliers accounting for 73.51% of total raw material purchases in FY2025 without long-term contracts. Additionally, all manufacturing facilities are located in Gujarat, exposing the company to region-specific risks. The company also has significant exposure to foreign currency fluctuations, given that exports accounted for 56.06% of revenue in FY2025. Furthermore, 26.61% of total revenue is derived from the U.S. market, making it susceptible to geopolitical and trade policy changes. Evolving industry trends towards sustainable and eco-friendly packaging also pose a potential long-term structural risk to the demand for PLWPP products.