Knack Packaging IPO opens with 15% GMP: Should you bid?
What's the story
Knack Packaging, a leading manufacturer of integrated packaging solutions, has opened its initial public offering (IPO) for subscription today. The company is looking to raise ₹439.5 crore through the IPO, which will be available for bidding until July 3. The price band for the offer has been fixed at ₹161-170 per share with a minimum bid of 88 shares.
Offer specifics
IPO consists of a fresh issue worth ₹380 crore
The IPO consists of a fresh issue worth ₹380 crore and an offer for sale (OFS) of up to ₹59.5 crore by existing shareholders. Ahead of the issue, the company's shares were commanding a gray market premium (GMP) of around 15%, indicating healthy investor interest. The stock is proposed to be listed on the BSE and NSE, with a tentative listing date of July 8.
Company profile
Strong export presence across 71 countries
Knack Packaging specializes in manufacturing Printed and Laminated Woven Polypropylene (PLWPP) bags for various industries including food grains, flour, sugar, pet food, fertilizers, and chemicals. The company has a strong export presence across 71 countries with over 1,950 customers globally. It holds a 10.1% market share in India's flexible bulk PLWPP bags segment and follows an integrated manufacturing model covering the entire production chain from polypropylene processing to printing and bag conversion.
Financial growth
Financials and use of proceeds
For FY26, Knack Packaging reported a revenue from operations of ₹823.4 crore, up from ₹736.5 crore in the previous year. The company's net profit also increased to ₹92.8 crore from ₹73.8 crore in FY25 while EBITDA improved to ₹152 crore with margins expanding to 18.5%. The company plans to use the fresh issue proceeds primarily for setting up a new manufacturing facility at Borisana in Gujarat with an estimated capital expenditure of around ₹320 crore.
Market advice
Brokerages recommend 'Subscribe' rating to the issue
Choice Broking has given a "Subscribe for Long Term" rating to the IPO, citing Knack Packaging's strong competitive position through its integrated operations and export presence. Anand Rathi has also recommended "Subscribe for Long Term" on the issue, noting that the company is well-positioned in the organized packaging industry with an integrated manufacturing model and strong export presence. At ₹170 per share, the issue is valued at 22.4 times FY26 earnings.