IPO Size: Rs. 440 cr

• Fresh Issue of Rs. 380 cr for part funding Rs. 365 cr capex worth Rs. 320 cr
• Offer for Sale (OFS) of Rs. 60 cr, mainly by promoter (90% to drop to 70% post IPO)

Price band: Rs. 161-170 per share

M cap: Rs. 2,080 cr, implying 21% dilution

IPO Date: Wed 1^st Jul to Fri 3^rd Jul 2026, Listing Wed 8^th Jul 2026

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Ahmedabad-based Packaging Company

Knack Packaging is a 20 year old packaging company manufacturing Printed and Laminated Woven Polypropylene (PLWPP) bags and PLWPP Pinch Bottom bags, customized for high-strength food and pet products packaging. Company has a 43,300 MTPA effective capacity manufacturing plant in Gujarat, utilised 82% in FY26. It enjoys nearly 10% domestic market share in this packaging category.

Plans 75% Capacity Addition in 18 Months

To cater to growing demand, company is establishing a new plant at existing premises, to be majority funded from IPO proceeds. Of Rs. 456 cr capex, about Rs.90 cr has already been deployed while Rs. 320 cr will be funded via fresh issue. Effective installed capacity will increase by 32,710 MTPA, increasing aggregate capacity to 76,000 MTPA by Oct 2027.

High Margins for B2B2C business

Despite B2B presence, margins are quite healthy, at 40% gross margin, 21% EBITDA and 11% net margin. Nearly 80% of power needs are met through captive renewable sources, which partly explains high margin. Company targets 90% captive renewal energy sources by 2030.

Knack’s net margin of 11% is also higher than peer average of 7% (TCPL Pack 6%, Mold-Tek Pack 8%, Time Technoplast 8%, EPL Ltd 8%).

Rising Financials

Over the last 3 fiscals, volume sold has increased at 16% CAGR to 38,157 MT, while the EBITDA per kg nearly doubled from Rs. 23 in FY23 to Rs. 45 in FY26. On FY26 topline of Rs. 823 cr, 56% comes from exports, with 30% from US and Mexico.

EBITDA for FY26 stood at Rs. 170 cr with PAT at Rs. 93 cr, leading to an EPS of Rs. 9.3 and an RoE of Rs. 35% on networth of Rs. 308 cr. Company has debt of Rs. 190 cr, mainly for working capital and recent renewable energy capex, which will halve net debt equity ratio from current 0.6:1 to 0.3:1, as equity expands via IPO.

Attractive Pricing

Mcap of Rs. 2,080 cr and enterprise value of Rs. 2,270 cr lead to a historic PE multiple of 18x, which is attractive for healthy net margin, expected mid-teen RoE going forward and large capacity expansion planned.

Knack’s net margins are the highest among the peer set, while larger peers TCPL packaging, Mold-Tek Packaging, Time Technoplast and EPL Ltd. are ruling at PE multiple of 18-28x, for lower RoE.