Knack Packaging IPO: Subscription Hits 8.34x with 17% GMP Gains

The Knack Packaging IPO has witnessed robust demand as it enters its final bidding day, with the issue already subscribed 8.34 times. With a grey market premium suggesting healthy listing gains, investors are closely watching this integrated packaging solutions provider.

As of the third day of bidding, the ₹439.5 crore IPO has shown significant momentum across all investor categories. While the overall subscription stands at 8.34x against the 1.89 crore shares offered, the breakdown reveals where the real strength lies:

  • Non-Institutional Investors (NIIs): This segment has shown the most aggressive interest, with the portion subscribed 23.53 times.
  • Retail Individual Investors (RIIs): Individual participation remains steady, with the retail portion booked 4.63 times.
  • Qualified Institutional Buyers (QIBs): Institutional demand is moderate but positive, standing at 3.48 times.

The IPO features a fresh issue of ₹380 crore and an Offer for Sale (OFS) of up to ₹59.5 crore, with a price band set between ₹161–₹170 per share.

Grey Market Sentiment and Expected Listing

Market sentiment remains upbeat heading into the listing, which is tentatively scheduled for July 8 on both the BSE and NSE. The Grey Market Premium (GMP) is currently trading at approximately 17% above the upper price band. If current trends hold, Knack Packaging is expected to list near ₹198 per share, offering a decent margin for investors seeking listing gains.

Business Profile and Financial Strength

Knack Packaging is a major player in the integrated packaging sector, specializing in Printed and Laminated Woven Polypropylene (PLWPP) bags. The company holds an estimated 10.1% market share in India’s flexible bulk PLWPP bags segment and serves a massive global clientele, exporting to 71 countries.

Financially, the company has demonstrated consistent growth. For FY26, revenue from operations rose to ₹823.4 crore, up from ₹736.5 crore in the previous year. Net profit saw a healthy jump to ₹92.8 crore from ₹73.8 crore in FY25, while EBITDA margins expanded to 18.5%. The company plans to utilize the fresh issue proceeds, specifically ₹320 crore, to fund a new manufacturing facility in Borisana, Gujarat.

Expert Outlook: Is It Worth Subscribing?

Brokerages like Choice Broking and Anand Rathi have both assigned a "Subscribe" rating, though they suggest a long-term perspective. Analysts believe the company’s integrated manufacturing model and strong export presence—including a joint venture in Mexico—provide a solid competitive moat.

Valued at approximately 22.4 times FY26 earnings at the upper price band, experts consider the pricing broadly fair. However, investors should remain mindful of potential risks such as global economic slowdowns, foreign currency fluctuations, and high customer concentration.

Key Takeaways

  • Strong Demand: The IPO is subscribed 8.34x so far, driven heavily by high Non-Institutional Investor (NII) interest (23.53x).
  • Potential Gains: A 17% GMP suggests a potential listing price near ₹198, providing an attractive entry for listing-gain seekers.
  • Growth Strategy: Proceeds are primarily earmarked for a new ₹320 crore manufacturing plant in Gujarat to bolster production capacity.