Knack Packaging

Knack Packaging is coming out with a 100% book building; initial public offering (IPO) of 2,71,16,191 shares of face value Rs 10 each in a price band Rs 161-170 per equity share.
Not more than 50% of the issue will be allocated to Qualified Institutional Buyers (QIBs), including 5% to the mutual funds. Further, not less than 15% of the issue will be available for the non-institutional bidders and the remaining 35% for the retail investors.
The issue will open for subscription on July 1, 2026 and will close on July 3, 2026.
The shares will be listed on BSE as well as NSE.
The face value of the share is Rs 10 and is priced 16.10 times of its face value on the lower side and 17.00 times on the higher side.
Book running lead managers to the issue are Systematix Corporate Services, IDBI Capital Markets & Securities and Pantomath Capital Advisors.
Compliance officer for the issue is Saloni Ghanshyambhai Hurkat.

Profile of the company

The company is one of the leading, integrated, innovation-oriented, export led and sustainable oriented packaging solutions provider, offering a diverse range of packaging solutions, including Printed and Laminated Woven Polypropylene (PLWPP) bags and PLWPP Pinch Bottom bags that are customized, high-strength packaging solutions for a wide range of sectors, including food products and pet foods. Its solutions enhance brand visibility on packaging, reduce the risk of counterfeiting, and improve operational performance.

The company is also one of the early movers in the manufacturing of Biaxially Oriented Polypropylene (BOPP)/ PLWPP bags, and the first company in India (and Asia) to provide laser cut and easy-open feature integrated into their PLWPP pinch bottom bags. With a legacy of over two decades of its Promoters, it offers a wide array of bulk packaging solution which has been developed over the decades through technological enhancements and industry experience. It also provides add-on solutions such as circular & back seam construction, half, full & register window, zig-zag cut, heatcut & bladecut etc., providing customers with enhanced and customized packaging options. Its diverse range of packaging solutions along with customised add-ons, makes it a one stop solution for its customers.

The company has been serving top brands under a B2B2C model, including household Indian names such as Baba Agro Food, Drools Pet Food, Ebro India, Laxmi Protein Products, Mosaic India, KRBL, Shriram Woven Sacks and DCM Shriram, as well as international brands across 71 countries like Cristo S.A., Sacos y Empaques Internacionales S.A. de C.V., Cargill and Repi Soap and Detergent PLC. These brands use its 5kg to 50kg packaging solutions, to offer their products which are typically in powder or granule form, to their respective customers. The key industries which it serves include grains and pulses - rice, dal, lentils, etc., flour & spices, sugar, salts, fruits & nuts, animal & pet foods, agriculture, seeds, charcoal, detergents powders & granules, fertilizers, chemicals, cement, tile adhesives, building materials, mineral bags etc.

Proceed is being used for:

Partial funding of capital expenditure towards setting up of new manufacturing facility at Borisana situated at Kadi, Mehsana, Gujarat (Project Site)
General corporate purposes

Industry overview

The Indian flexible packaging market, one of the fastest growing globally, has seen a surge in demand for PLWPP bags due to their cost-effectiveness and adaptability. These bags are crafted by laminating a BOPP film onto woven polypropylene fabric, creating a robust packaging solution that combines the strength of woven polypropylene with the high-quality printability and moisture resistance of BOPP film. These bags are widely used for packaging commodities like rice, wheat, pulses, fertilizers, cement, and pet food, catering to both domestic and export markets.

The PLWPP bulk bags (5-50kg) market was valued at Rs 25.0 billion in FY2024 and Rs 28.6 billion in FY2025 and is expected to reach Rs 50.0 billion by FY2029, expanding at a CAGR of 15.0% during the given period. This CAGR growth of 15% is fuelled by a combination of factors, including the current low market base of Rs 25.0 billion in FY2024, which sets the stage for high percentage growth. The industry is also maturing, with increasing awareness among manufacturers and end users about the functional and branding advantages of PLWPP bags. The PLWPP bags (5-50kg) can be preferred choice across industries where product protection, branding, and transportation efficiency are essential. With the Indian market's increasing emphasis on packaging innovation and sustainability, the demand for these versatile bags continues to grow in both domestic and international markets.

The PLWPP bags are emerging as a reliable packaging solution for highly automated manufacturing and packaging operations. Their consistent dimensions, high tensile strength, and durability make them well-suited for high-speed machinery, helping to reduce jams, misfeeds, and line stoppages. Features such as easy mouth opening, pre-gusseted, perforated, or micro-punched to facilitate air release, and strong sealing capabilities ensure efficient filling and secure closure, even under demanding conditions. The laminated finish enhances stacking strength and pallet stability, while the ability to print high-resolution barcodes and traceability data supports digital inventory systems.

Pros and strengths

Focus on operational efficiency through integrated and digitised processes: The company has adopted a structured and technology-driven approach to manage supply chain, procurement, and production functions to support operational efficiency and cost control. Knack Galaxy, its proprietary solution, is central to this, which integrates and tracks critical business functions in real-time such as procurement, production, dispatch, and logistics management. It is designed to serve customers through order and delivery tracking, internal teams via resource planning and monitoring, and suppliers through seamless coordination of incoming materials.

Capability to deliver complex product design with accuracy: The company has developed capabilities in engineering and manufacturing product designs that involve a high degree of complexity, technical precision, and process consistency. These capabilities cover a range of design and production aspects, including bag construction techniques, multi-layer lamination, and the incorporation of add-on features such as valve closures, integrated handles, various perforation patterns, and custom structural formats as per product requirements. Its bags can be fully customized with all available add-on features to meet specific client requirements.

Customer-centric custom packaging solutions: The company works with customers to convert basic inputs into complete packaging solutions. Typically, customers provide only the type of material to be packed such as rice, wheat, or lentils and the required weight range, generally between 5kg and 50kg. Its in-house design team then develops bag designs that align with the customer’s branding and technical requirements, moving from concept to design in a structured manner. It also offers support in cylinder printing services. In cases where customers manage the procurement and development of printing cylinders, it assists by ensuring that their approved designs are adapted for accurate printing. Its team aligns the artwork with technical specifications to help achieve consistent and reliable print outcomes. This process enables customers to focus on their core business while it manages the design and technical aspects of packaging development.

Presence across Indian and global market catering to various industries: The company operates across both domestic and international markets, enabling it to serve a wide range of customers across geographies and industries. Its international presence is supported by its wholly owned Subsidiary, Knack Packaging SA (RF) Proprietary in South Africa. For March 31, 2026, its revenue from operations was distributed between export and domestic sales, contributing around 56.30% and 43.70% respectively. It serves a diverse customer base across various end-use industries, including pulses, rice, lentils, fertilizers, pet food, etc. These industries are primarily B2C in nature, and demand trends in these sectors influence packaging requirements. Its offerings span across different products, substrates, applications, and geographies, with no material dependency on any single customer or segment. This diversification reduces concentration risk and contributes to a more balanced revenue profile.

Risks and concerns

High dependence on top 10 suppliers: It is significantly dependent on its top 10 suppliers for raw materials, with whom it does not have long-term contracts for the purchase of raw materials and it purchases such raw materials and inputs on spot order basis. The company's top ten suppliers accounted for 86.21%, 73.51% and 76.99% of its total raw material purchases for Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Any delay or default in payment of its suppliers will affect its manufacturing schedule and consequently its business operations.

Top 10 customers account for over 40% of revenue: The company derives a substantial portion of its revenue from operations from its top 10 customers. The company's top ten customers contributed 40.87%, 43.91% and 44.16% of its revenue from operations for Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. Further, it does not have any contractual arrangements with its top 10 customers and neither of these customers are related parties. Therefore, its inability to retain them may have an adverse impact on its business, results of operations and financial performance.

Dependence on US market: The company derived 23.66% of its revenue from operations from customers in the United States (US) during Fiscal 2026. Any adverse situation in the United States, including any breakdown in India-US bilateral relations may adversely affect its business, results of operations, and financial condition Accordingly, a significant proportion of its business operations and financial outcomes is directly linked to the performance and stability of the US market. This concentration subjects its business to risks specific to these regions, including political, economic, regulatory and logistical challenges.

Single-region manufacturing concentration risk: Its manufacturing facilities are concentrated in a single region domestically i.e., Gujarat, which are critical to its business operations. The concentration of its manufacturing facilities in a single region exposes it to various risks arising out of concentration of such facilities in one particular state and any significant social, political or economic disruption, or natural calamities or civil disruptions in this region, or changes in the policies of the state or local governments of this region or the Government of India, could require it to incur significant capital expenditure and change its business strategy. Any shutdown of its manufacturing facilities due to adverse conditions in the state of Gujarat or other reasons may adversely affect its business, financial condition, results of operations, cash flows and future business prospects.

Outlook

Knack Packaging is engaged in the manufacturing and export of PP/HDPE Woven Sacks and BOPP Laminated PP Woven Bags. It is the first company in India (and Asia) to provide laser cut and easy-open feature integrated into their PLWPP pinch bottom bags. They cater to a variety of end user segments, including grains and pulses like rice, dal, lentils, etc., flour & spices, sugar, salts, fruits & nuts, animal & pet foods, agriculture, seeds, charcoal, detergents powders & granules, fertilizers, chemicals, cement, tile adhesives, building materials, mineral bags etc. On the concern side, it faces significant competition from domestic and international packaging businesses (including players from both organized and unorganized sector). Increased competition from existing manufacturers (belonging primarily, from the organized sector) and new entrants in the packaging market in India or outside India may cause it to lose or fail to attract new consumers, maintain existing customers and result in an overall reduction in its market share. If its competitors’ production capacity surpasses it’s in terms of quality or performance or competitive pricing, its market share, profitability and results of operations may be adversely impacted.

The issue has been offering 2,71,16,191 shares in a price band of Rs 161-170 per equity share. The aggregate size of the offer is around Rs 436.57 crore to Rs 460.98 crore based on lower and upper price band respectively. On performance front, the company’s revenue from operations increased by 11.80% from Rs 736.49 crore in Fiscal 2025 to Rs 823.43 crore in Fiscal 2026. Restated Profit for the year increased by 25.62% from Rs 73.81 crore in Fiscal 2025 to Rs 92.72 crore in Fiscal 2026.

Meanwhile, as a part of its commitment, it plans to expand into new product segments, such as Modern Trend Packaging to drive growth and increased market penetration. By leveraging its market expertise, it aims to introduce new-aged product applications that meet evolving customer needs including PLPE Pinch Bottom Bag, Zipper Pinch bottom Bag, Easy Carry Handle Block Bottom Bag, Corner Seal Block Bottom Bag and Easy open Block Bottom Bag. In addition, the company is planning to increase its presence in PLWPP bags (more than 50kg) market as well.

Knack Packaging Ltd.