An export-oriented, integrated PLWPP bag maker from Gujarat hits the market with a ~Rs 439 crore issue
Knack Packaging Ltd., an integrated, innovation-driven, export-oriented packaging solutions provider, opens for subscription on July 1 with the issue closing on July 3. Incorporated in 2013, the company manufactures Printed and Laminated Woven Polypropylene (PLWPP) bags, including PLWPP pinch bottom bags, and held an estimated 10.1% share of the Indian flexible bulk PLWPP bags market in FY25. Both Choice Broking and Anand Rathi recommend subscribing for the long term.
What the Company Does
Knack Packaging offers high-strength, customized packaging solutions catering to industries such as food grains, flour, sugar, pet food, agriculture, fertilizers, and cement. It operates a fully vertically integrated manufacturing model — covering the entire chain from polypropylene granule processing to tape extrusion, weaving, lamination, printing, and bag conversion — from facilities in Gujarat with an effective installed capacity of 43,300 MTPA. Notably, it was the first company in India and Asia to introduce laser-cut and easy-open features in PLWPP pinch bottom bags.
The company serves over 1,950 customers across 71 countries under a B2B2C model, with marquee clients including Cargill, Baba Agro Food, Drools Pet Food, Ebro India, KRBL, and DCM Shriram. Exports are a major contributor, accounting for around 56% of revenue in FY26, with the United States its single largest export market at 23.7%. Around 80% of its energy needs are met through renewable sources including a solar farm, windmill, and rooftop solar.
Issue Details
| Particulars | Details |
|---|---|
| Issue Opens | July 1, 2026 |
| Issue Closes | July 3, 2026 |
| Listing Date | July 8, 2026 (BSE & NSE) |
| Price Band | Rs 161 – Rs 170 per share |
| Face Value | Rs 10 |
| Total Issue Size | ~Rs 436 – 439 crore |
| Fresh Issue | Rs 380 crore |
| Offer for Sale | Rs 56.35 – 59.50 crore |
| Minimum Lot | 88 shares |
| Implied Market Cap (Upper Band) | ~Rs 2,080 crore |
| QIB / NII / Retail Split | 50% / 15% / 35% |
| BRLMs | Systematix, IDBI Capital Markets, Pantomath Capital Advisors |
| Registrar | MUFG Intime India Pvt. Ltd. |
The company will not receive any proceeds from the OFS. Promoter shareholding declines from around 89.6% pre-issue to roughly 70.4–70.6% post-issue.
Objects of the Issue
From the fresh issue net proceeds, around Rs 320 crore will fund part of the capital expenditure towards setting up a new manufacturing facility at Borisana, Kadi, Mehsana, Gujarat, with the residual amount going towards general corporate purposes.
Financial Performance
| Particulars (Rs cr) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue from Operations | 654.6 | 736.5 | 823.4 |
| EBITDA | 96.9 | 133.5 | 152.0 |
| EBITDA Margin | 14.8% | 18.1% | 18.5% |
| PAT (Reported) | 46.0 | 73.8 | 92.7 |
| PAT Margin | 7.0% | 10.0% | 11.3% |
| RoE | 32.7% | 34.4% | 30.7% |
| RoCE | 21.9% | 26.5% | 23.0% |
The company has demonstrated consistent growth, with revenue rising at around 17% CAGR over FY23–26 while EBITDA and PAT margins have steadily expanded through better cost management and improved operating leverage. Return ratios are strong, though the debt-heavy balance sheet (net debt of around Rs 221 crore in FY26) and rising working capital cycle are worth monitoring.
Valuation and Peer Comparison
At the upper band of Rs 170, the issue is valued at a P/E of around 22.4x on FY26 earnings and an EV/Sales of roughly 2.3x. Both brokerages describe it as fully priced but supported by fundamentals. Choice Broking states the valuation “appears to be fully priced compared to its listed peers,” while noting the company’s consistent financial performance, ongoing capacity expansion, and export strength “provide comfort.”
Anand Rathi similarly notes that at a P/E of 22.4x, “the issue appears to be fairly priced,” adding that Knack “is well positioned to benefit from structural growth in flexible packaging demand, supported by integration, scale and export presence.” Both assign a “Subscribe for Long Term” rating.
| Company | P/E (x) | EV/Sales (x) | RoE (%) | FY26 EBITDA Margin (%) |
|---|---|---|---|---|
| Knack Packaging | 22.4 | 2.3 | 13.5 | 18.5 |
| Uflex | 9.6 | 0.8 | 3.8 | 12.1 |
| EPL | 18.7 | 1.5 | 12.8 | 20.3 |
| Cosmo First | 13.1 | 0.9 | 9.2 | 10.5 |
| Huhtamaki India | 10.8 | 0.4 | 9.2 | 7.7 |
| TCPL Packaging | 26.9 | 1.6 | 11.7 | 16.2 |
Risks to Consider
Customer concentration is a factor — the top 10 customers contributed around 41% of revenue in FY26, with Cargill alone at nearly 17%. With exports at 56% of revenue, the company is exposed to foreign exchange fluctuations and dependent on export incentive schemes like RoDTEP and Duty Drawback.
All manufacturing facilities are located in Gujarat, creating geographic concentration risk. Polypropylene granules — the primary raw material accounting for around 60% of revenue as cost of materials — expose the company to raw material price volatility, and supplier concentration is high with the top 10 suppliers contributing 86% of purchases. A general slowdown in global economic activity could also pressure export demand.