Knack Packaging IPO (1 July - 3 July) Analysis

IPO Analysis  |  BSE and NSE Main Board  |  100% Book Built Offer (Fresh Issue + OFS)

Based on Red Herring Prospectus dated June 23, 2026  |  PLWPP Bags and Flexible Bulk Packaging  |  Ahmedabad, Gujarat

STATUS: RHP FILED  |  Fresh Issue: Rs.3,800 million  |  OFS: up to 3,500,000 Shares by Promoters  |  Regulation 6(1) Main Board  |  Anchor Bidding June 30, Bid/Offer Opens July 1, Closes July 3, 2026

 Knack Packaging Limited (KPL) is an Ahmedabad, Gujarat-based manufacturer of Printed and Laminated Woven Polypropylene (PLWPP) bags, including PLWPP Pinch Bottom bags, which are customised, high-strength bulk packaging solutions used across a wide range of sectors including food products, pet foods, agriculture, chemicals, and building materials. Originally incorporated as Knack Packaging Private Limited on March 4, 2013 under the Companies Act, 1956, the company converted to a public limited company effective June 23, 2025.

Its registered and corporate office is at 330/A, Kalasagar Shopping Hub, Opp Saibaba Temple, Satadhar Cross Road, Ghatlodiya, Ahmedabad 380061, Gujarat. Its website is www.knackpackaging.com. Its CIN is U25200GJ2013PLC073847. The three promoters are Alpesh Tulsibhai Patel, Pravinkumar Ambalal Patel, and Rashminbhai Tulsibhai Patel.

Business model: KPL operates as an integrated, vertically integrated packaging solutions provider.

The company processes polypropylene (PP) granules through the complete value chain, from tape extrusion through fabric weaving, printing, lamination, and final bag fabrication, all in-house at its Gujarat facilities. This vertical integration across a net land area of 1,233,435.57 sq. ft. with 924,407.55 sq. ft. of constructed space, with an installed capacity of 43,300 MTPA, gives KPL full control over quality, cost, and lead times. As of May 31, 2026, the company employs 1,959 staff (on-roll and contractual combined).

Product differentiation: KPL positions itself as the first company in India (and Asia) to provide laser-cut and easy-open features integrated into PLWPP Pinch Bottom bags. These bags offer six-side branding surfaces, tamper-proof closures, optional RFID/NFC/QR code tagging, moisture protection, and ergonomic user features.

The company holds approximately 10.1% market share in the Indian market for flexible bulk PLWPP bags including PLWPP Pinch Bottom bags in Fiscal 2025 (Source: Technopak Report). The company also maintains a proprietary cylinder library of 73,000+ printing cylinders developed for over 1,950+ customers and 13,379 SKUs, stored in a dedicated 92,065.47 sq. ft. warehouse, creating a structural customer retention mechanism through custody of customer branding assets.

Export orientation: KPL is strongly export-driven, with international sales consistently representing approximately 56 to 57% of total revenue from operations across Fiscal 2024, 2025, and 2026. Products are exported to clients in 71 countries including Cristo S.A. (Chile), Sacos y Empaques Internacionales S.A. de C.V. (Mexico), Cargill, and Repi Soap and Detergent PLC (Ethiopia).

Approximately 23.66% of total export revenue in Fiscal 2026 came from the United States alone, making the US both a significant revenue contributor and a concentration risk. The company is officially recognised as a Two Star Export House by the Government of India.

Certifications: ISO 9001:2015 (quality), ISO 14001:2015 (environmental), ISO 45001:2018 (occupational health and safety), BRCGS packaging material certification, EN 15343 (recycled plastic content traceability), and EcoVadis Bronze medal (2024) for sustainability management.

Key Basics

This is a 100% Book Built Offer comprising both a Fresh Issue and an Offer for Sale, listing on both BSE and NSE main boards under Regulation 6(1) of SEBI ICDR Regulations, the standard main board profitability eligibility route. This is the largest and most institutionally structured of the three IPOs reviewed in this batch.

Document Type	Red Herring Prospectus (RHP) dated June 23, 2026. Bidding dates confirmed; Price Band to be announced at least two Working Days prior to the Bid/Offer Opening Date.
Issue Structure	Fresh Issue of Equity Shares aggregating up to Rs.3,800.00 million, plus Offer for Sale of up to 3,500,000 Equity Shares by 10 Selling Shareholders (9 promoter/promoter group members and 1 other).
Face Value	Rs.10 per Equity Share
OFS Selling Shareholders	Alpesh Tulsibhai Patel (up to 675,750 shares), Pravinkumar Ambalal Patel (up to 300,000 shares), Rashminbhai Tulsibhai Patel (up to 675,750 shares), Tulsibhai Keshavlal Patel (up to 362,000 shares), Patel Kamlesh Ambalal (up to 307,500 shares), Dharmisthaben Pravinbhai Patel (up to 125,000 shares), Shital Alpesh Patel (up to 298,250 shares), Divyaben Rashminkumar Patel (up to 298,250 shares), Patel Jay Pravinkumar (up to 170,000 shares), and Shitalben Kamlesh Patel (up to 287,500 shares).
Promoters	Alpesh Tulsibhai Patel, Pravinkumar Ambalal Patel, and Rashminbhai Tulsibhai Patel.
Eligibility	Regulation 6(1) of SEBI ICDR Regulations, the standard main board profitability-based eligibility route.
Employee Reservation	Eligible Employees may bid in the Employee Reservation Portion (up to 5% of post-Offer paid-up capital). Employee Discount may be offered, to be announced at least two Working Days before the Bid/Offer Opening Date.
Listing Exchange	BSE Limited and National Stock Exchange of India (NSE). Designated Stock Exchange: BSE.
BRLMs	IDBI Capital Markets and Securities Limited and Pantomath Capital Advisors Private Limited (two BRLMs). Contact persons: Pinank Turakhia/Lokendra Parihar (IDBI Capital) and Amit Maheshwari (Pantomath).
Registrar	MUFG Intime India Private Limited (formerly Link Intime India Private Limited). Contact: Shanti Gopalkrishnan.
Anchor Bidding	Tuesday, June 30, 2026.
Bid/Offer Opens	Wednesday, July 1, 2026.
Bid/Offer Closes	Friday, July 3, 2026.
Listed Peers	Mold-Tek Packaging Limited, TCPL Packaging Limited, and Time Technoplast Limited, all identified as listed industry peers for KPI and accounting ratio comparison.

 The OFS proceeds go entirely to the Selling Shareholders and not to the company. The Fresh Issue proceeds of Rs.3,800 million are deployed by the company for a single, substantial capital expenditure project: establishing a new greenfield manufacturing facility in Kadi, Mehsana, Gujarat.

Object	Amount (Rs. Million)	Details
Partial Funding of Capex: New Manufacturing Facility at Borisana, Kadi, Mehsana, Gujarat	3,200.00	Funding a new greenfield manufacturing facility at the Project Site. Total estimated project cost per CARE Analytics Report (dated June 13, 2026) is Rs.3,649.56 million. Rs.128.77 million already deployed as of the RHP date. Of the total cost, Rs.3,200 million will come from Net Proceeds and the balance from internal accruals. Deployment is planned across two years: Rs.1,500 million in FY2027 and Rs.1,700 million in FY2028.
General Corporate Purposes	[TBD]	Capped at 25% of Gross Proceeds (Rs.950 million maximum). To be finalised upon determination of the Offer Price at Prospectus stage.
TOTAL FRESH ISSUE	Rs.3,800 million	100% to the company. OFS proceeds go entirely to the Selling Shareholders. Fund requirements have been assessed by CARE Analytics and Advisory Private Limited via CARE Report dated June 13, 2026, but have not been appraised by any bank or financial institution.

The use of proceeds is the clearest possible capex-growth story: Rs.3,200 million of the Rs.3,800 million Fresh Issue (84.2% of identified objects) is earmarked for a specific new manufacturing facility with an independently issued CARE Report.

The new facility at Kadi, Mehsana will meaningfully expand KPL's current 43,300 MTPA installed capacity, which had reached near-full utilization across FY2024, FY2025, and FY2026, supporting the company's revenue growth ambitions that would otherwise be constrained by existing capacity limits.

Unlike many IPOs where proceeds fund working capital or ambiguously described corporate purposes, this is a well-defined, externally validated capex deployment with a clear operational rationale.

Financial Performance

Note: All figures in Rs. million unless stated. Financial periods: Fiscal 2026 (year ended March 31, 2026), Fiscal 2025 (year ended March 31, 2025), Fiscal 2024 (year ended March 31, 2024). Restated Consolidated Financial Statements under Ind AS. KPL presents a high-quality, high-margin growth story with EBITDA margins among the highest in its peer group and PAT growing at 101.6% over two years.

Revenue, EBITDA, and Profitability

Metric	FY2026 (Rs. Mn)	FY2025 (Rs. Mn)	FY2024 (Rs. Mn)
Revenue from Operations	8,234.34	7,364.90	6,545.59
Revenue Growth % YoY	+11.81%	+12.52%	+26.25% (vs FY2023)
Export as % of Revenue	~57%	~56%	~56%
Other Income	203.35	108.85	44.49
Total Income	8,437.69	7,473.75	6,590.08
Cost of Materials Consumed	4,908.51	4,382.65	3,959.86
Employee Benefits Expense	471.26	420.29	455.12
Finance Costs	159.13	169.57	152.90
Depreciation and Amortisation	293.00	281.52	243.35
Other Expenses	1,455.39	1,162.40	1,190.82
Total Expenses	7,166.88	6,481.47	5,972.58
Profit Before Tax	1,270.81	992.28	617.50
Tax Expenses (Net)	323.39	254.18	157.73
Profit After Tax	927.24	738.10	459.77
PAT Growth % YoY	+25.63%	+60.54%	N/A
Gross Profit (Revenue minus COGS)	3,446.24	2,917.22	2,615.20
Gross Profit Margin %	41.85%	39.61%	39.95%
EBITDA	1,722.94	1,443.37	1,013.74
EBITDA Margin % (of total income)	20.42%	19.31%	15.38%
PAT Margin % (of total income)	10.99%	9.88%	6.98%
Return on Capital Employed (RoCE) %	46.71%	50.36%	45.42%
Return on Invested Capital (RoIC) %	33.41%	34.62%	29.51%
Debt to Equity Ratio (times)	0.62x	0.80x	1.23x
Return on Equity (RoE) %	35.75%	41.70%	38.38%
Debt Service Coverage Ratio (times)	4.95x	3.80x	3.25x
Total Quantity Sold (MT)	38,157.49	34,471.76	30,590.10
EBITDA per KG (Rs.)	45.15	41.87	33.14
Basic and Diluted EPS (Rs.)	9.27	7.38	4.60
Return on Net Worth (RoNW) %	35.47%	41.54%	38.97%
NAV per Share (Rs.)	30.82 (FY2026)	N/A	N/A

KPL's financial performance is exceptional across virtually every metric. Revenue has grown from Rs.6,545.59 million (FY2024) to Rs.8,234.34 million (FY2026), a 25.8% increase over two years. More notably, PAT has grown 101.7% over the same period, from Rs.459.77 million to Rs.927.24 million, driven by consistently expanding margins.

EBITDA margins have grown from 15.38% to 20.42%, and PAT margins from 6.98% to 10.99%, reflecting strong operating leverage as volumes have scaled. RoCE of 46.71% and RoNW of 35.47% in Fiscal 2026 place KPL firmly among the top performers in its peer group on capital efficiency measures. EBITDA per KG, the company's own headline operational KPI, grew from Rs.33.14 to Rs.45.15 over two years, indicating successful premiumisation and margin improvement per unit sold rather than merely volume-led growth.

The debt-to-equity ratio has improved meaningfully from 1.23x (FY2024) to 0.80x (FY2025) to 0.62x (FY2026), demonstrating that the company has been deleveraging consistently through retained earnings. The DSCR of 4.95x in FY2026 indicates comfortable debt service capacity. Post-IPO, with the Fresh Issue proceeds funding the new facility, the balance sheet will absorb a significant new capex cycle, which will likely cause leverage to rise temporarily before the new capacity generates incremental revenue and EBITDA.

Balance Sheet

Balance Sheet Item	FY2026 (Rs. Mn)	FY2025 (Rs. Mn)	FY2024 (Rs. Mn)
Equity Share Capital	1,000.00	50.00	50.00
Reserves and Surplus	2,081.85	2,097.09	1,356.22
Total Shareholders Funds	3,081.85	2,147.09	1,406.22
Total Borrowings (Current and Non-Current)	1,907.09 (approx.)	1,722.93 (approx.)	1,730.93 (approx.)
Total Assets	5,952.48	4,493.61	3,793.81
Trade Receivables	2,307.18	1,685.82	1,672.04
Cash and Cash Equivalents	61.31	113.62	29.68
Net Cash from Operating Activities (Rs. Mn)	919.78	940.54	324.47

Total Assets grew from Rs.3,793.81 million (FY2024) to Rs.5,952.48 million (FY2026), a 57% increase in two years, reflecting both operating asset growth and the early capex deployment for the new facility. The equity share capital jump from Rs.50 million to Rs.1,000 million between FY2025 and FY2026 reflects a 20-fold bonus share issuance (from original paid-up capital to Rs.1,000 million), which explains the dramatic per-share metric recalibration.

Operating cash flow has been consistently strong and positive: Rs.324.47 million (FY2024), Rs.940.54 million (FY2025), and Rs.919.78 million (FY2026), confirming that earnings quality is high and the company does not depend on working capital manipulation for reported profitability. Cash balances are thin (Rs.61.31 million as at March 31, 2026), but the strong operating cash generation and available debt facilities provide adequate operational liquidity.

How Does It Compare to Peers?

The RHP names Mold-Tek Packaging Limited, TCPL Packaging Limited, and Time Technoplast Limited as listed industry peers. While all three are packaging companies, the RHP itself notes they may not be perfectly comparable to KPL's specific PLWPP flexible bulk bag positioning.

Metric (FY2026)	Knack Pkg	Mold-Tek	TCPL Pkg	Time Technoplast
Revenue (Rs. Mn)	8,234.34	8,866.10	18,102.16	61,052.00
Revenue Growth %	11.81%	13.48%	2.26%	11.88%
Gross Profit Margin %	41.85%	45.87%	42.49%	28.63%
EBITDA Margin %	20.42%	19.56%	17.31%	14.74%
PAT (Rs. Mn)	927.24	728.74	977.96	4,766.10
PAT Margin %	10.99%	8.21%	5.33%	7.79%
RoCE %	46.71%	15.27%	24.40%	19.73%
RoNW %	35.47%	13.37%	14.34%	10.98%
Debt to Equity (times)	0.62x	0.31x	0.80x	0.16x
EPS Basic (Rs.)	9.27	9.99 (FV Rs.1)	107.47 (FV Rs.10)	21.93 (FV Rs.5)
CMP (June 19, 2026)	N/A (pre-listing)	Rs.178.42 (FV Rs.1)	Rs.3,029.40	Rs.698.10
P/E Ratio (based on CMP)	N/A	17.86x	28.19x	31.83x

This peer comparison reveals KPL's financial quality clearly. Its EBITDA margin of 20.42% leads all three named peers (Mold-Tek: 19.56%, TCPL: 17.31%, Time Technoplast: 14.74%). Its PAT margin of 10.99% is the highest of the four companies. Most strikingly, its RoCE of 46.71% and RoNW of 35.47% dwarf the peer group by a very wide margin (Mold-Tek: 15.27% RoCE and 13.37% RoNW; Time Technoplast: 19.73% RoCE and 10.98% RoNW), indicating superior capital deployment efficiency relative to competitors of comparable or larger scale.

The peers trade at P/E multiples of 17.86x to 31.83x. Applying this range to KPL's FY2026 EPS of Rs.9.27 gives an indicative price range of approximately Rs.166 to Rs.295, though IPO pricing will be determined by institutional book building, and a premium to listed peers may be justified by KPL's superior margins and returns.

Key Risks

l  New greenfield facility (Rs.3,649.56 million total cost) represents transformational capex on a still-small balance sheet: the new Kadi, Mehsana facility has a total estimated cost of Rs.3,649.56 million, against the company's current total equity of Rs.3,081.85 million and total assets of Rs.5,952.48 million. This is a single project of greater value than the company's entire equity base, representing the largest financial commitment in the company's history. Delays, cost overruns, execution challenges, or lower-than-expected demand absorption at the new facility post-commissioning could have a material impact on the company's financial profile for several years. The CARE Report provides independent assessment, but no bank or financial institution has appraised the project.

l  Concentrated customer base despite apparent diversification: the largest single customer contributed 16.73% of revenue from operations in Fiscal 2026, and the top 5 customers contributed 32.86%. While these figures represent an improving trend from Fiscal 2024 (single customer: 22.33%, top 5: 35.95%), they remain material concentrations for a company with no contractual arrangements with any of its top 10 customers. Loss of the largest customer alone would reduce revenue by approximately Rs.1,377 million, equivalent to roughly 80% of FY2026 PAT.

l  All manufacturing facilities concentrated in Gujarat: KPL's entire production infrastructure is located at facilities in Gujarat. Any adverse development in Gujarat, whether from natural calamities, regulatory changes, power disruptions, water scarcity, or industrial disputes affecting specifically this state, would directly impair 100% of the company's manufacturing capability. The new Kadi, Mehsana facility adds to this geographic concentration rather than diversifying it.

l  Currency risk on approximately 56 to 57% of revenue derived from exports to 71 countries: with more than half of revenue from international sales, KPL is materially exposed to foreign exchange volatility. Rupee appreciation against major trading currencies (USD, EUR) would directly compress realised export revenue in INR terms without a proportional change in underlying costs (which are predominantly INR-denominated). Approximately 23.66% of total export revenue in Fiscal 2026 came from the US alone, creating a specific USD concentration.

l  Raw material cost exposure to PP granule price volatility: KPL's primary raw material, polypropylene granules, is a derivative of crude oil and naphtha. Global crude oil price movements, capacity additions or disruptions at major petrochemical producers, and logistics disruptions can cause significant input cost volatility. With gross margins of 41.85%, any material input cost increase that cannot be immediately passed through to customers would directly compress profitability.

l  Post-IPO capex cycle will likely cause temporary leverage increase and working capital pressure: the two-year deployment schedule (Rs.1,500 million in FY2027 and Rs.1,700 million in FY2028) will absorb most of the Fresh Issue proceeds over an extended period, during which the new facility will not yet be generating revenue. Combined with ongoing working capital requirements of the existing business, this creates a period of elevated financial commitment before the new capacity contributes to earnings.

l  US trade policy risk on export revenue: approximately 23.66% of total export revenue comes from the United States. Any US tariff escalation on Indian imports, trade restriction, or policy changes affecting packaging imports could materially reduce this revenue stream, which currently accounts for more than one-eighth of total group revenue.

l  Environmental and sustainability compliance requirements: KPL operates in the woven polypropylene packaging segment, which faces ongoing regulatory scrutiny around single-use plastics and packaging sustainability across multiple markets. Evolving regulations in India and in key export markets (Europe, US) may require product modifications, additional certifications, or investments in recycled or biodegradable materials, increasing costs and compliance complexity.

l  Pending legal proceedings: the RHP discloses aggregate outstanding borrowings secured by personal guarantees from promoters totalling Rs.4,510 million as on May 31, 2026, and notes that invocation of such guarantees could affect the company's operations. Additionally, the company and its promoters have certain pending legal proceedings.

l  Total borrowings of approximately Rs.4,510 million (inclusive of guarantees): while the balance sheet leverage ratio of 0.62x looks manageable, the total financial obligations including guarantees and contingent liabilities represent a meaningful commitment that investors should review in full in the risk factors section of the RHP.

Positives to Note

l  Best-in-class EBITDA margins, PAT margins, RoCE, and RoNW versus all three named listed peers: KPL's EBITDA margin (20.42%), PAT margin (10.99%), RoCE (46.71%), and RoNW (35.47%) all lead Mold-Tek Packaging, TCPL Packaging, and Time Technoplast in Fiscal 2026, a remarkably consistent outperformance across multiple capital and profitability efficiency metrics simultaneously.

l  Strong and consistent operating cash generation: positive operating cash flows of Rs.324.47 million (FY2024), Rs.940.54 million (FY2025), and Rs.919.78 million (FY2026) confirm robust cash-backed earnings quality, with cash conversion remaining healthy even as the business scales rapidly.

l  Export leadership with Two Star Export House recognition and 71-country distribution: the company's strong international presence across 71 countries, serving clients including Cargill and major food, pet food, and chemical brands globally, demonstrates a diversified international demand base and positions KPL as a competitively validated exporter with a proven track record in demanding international markets.

l  First-mover advantage with laser-cut easy-open PLWPP Pinch Bottom bag technology: being the first manufacturer in India and Asia to integrate laser-cut and easy-open features into PLWPP Pinch Bottom bags, combined with a 73,000+ cylinder library that effectively makes KPL the custodian of customer branding assets, creates genuine structural switching costs and customer retention advantages not easily replicated by competitors.

l  Clear and externally validated capex use of proceeds with a CARE Report: Rs.3,200 million of the Rs.3,800 million Fresh Issue goes toward a specific new manufacturing facility backed by a detailed project report from CARE Analytics. This is the highest-quality, most specific use-of-proceeds justification of any SME or main board issuer reviewed in this series, reducing the uncertainty typically associated with unappraised or vaguely described use-of-proceeds.

l  Consistent deleveraging with debt-to-equity falling from 1.23x (FY2024) to 0.62x (FY2026): the company has been systematically reducing leverage through profitability and retained earnings even as it has simultaneously expanded its asset base, demonstrating disciplined financial management heading into a major capex cycle.

l  Regulation 6(1) main board listing confirms multi-year profitable operating history: unlike issuers that must rely on the alternative Regulation 6(2) profitability waiver, KPL qualifies under the standard main board route, reflecting a track record of sustained profitability across multiple financial years that satisfies SEBI's most demanding eligibility criteria for a mainboard IPO.