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

The Knack Packaging IPO is witnessing robust momentum as it enters its final day of bidding, driven by significant interest from high-net-worth individuals. With a healthy grey market premium and strong financial fundamentals, the market is closely watching this integrated packaging solutions provider.

Strong Subscription Demand Across Investor Categories

As of the third day of bidding, the ₹439.5 crore Knack Packaging IPO has achieved an overall subscription of 8.34 times against the 1.89 crore shares on offer. The demand is particularly noteworthy among Non-Institutional Investors (NIIs), who have subscribed 23.53 times the allotted portion.

Qualified Institutional Buyers (QIBs) have shown moderate interest with a 3.48 times subscription, while Retail Individual Investors (RIIs) have maintained steady participation, booking the portion 4.63 times. The IPO is priced at a band of ₹161–170 per share, with a minimum application size of 88 shares.

Grey Market Premium Signals Healthy Listing Gains

Investor sentiment remains bullish, reflected in the Grey Market Premium (GMP). Currently, Knack Packaging shares are trading at a premium of approximately 17% over the upper price band of ₹170. If current trends persist, the shares are expected to list near ₹198, offering a potentially lucrative opportunity for investors seeking listing gains upon its scheduled debut on July 8.

Business Profile and Robust Financial Performance

Knack Packaging operates as an integrated manufacturer of Printed and Laminated Woven Polypropylene (PLWPP) bags. Serving diverse sectors like food grains, fertilizers, and chemicals, the company boasts an estimated 10.1% market share in India's flexible bulk PLWPP bags segment. Its global footprint is substantial, exporting to 71 countries and serving over 1,950 customers, including major names like Cargill, KRBL, and Drools.

The company’s financials show a positive growth trajectory. For FY26, revenue from operations rose to ₹823.4 crore from ₹736.5 crore in the previous year. Net profit saw a significant jump to ₹92.8 crore (up from ₹73.8 crore in FY25), while EBITDA margins expanded to 18.5% on an EBITDA of ₹152 crore. The company intends to use ₹320 crore of the fresh issue proceeds to fund a new manufacturing facility in Borisana, Gujarat.

Expert Views: Is It a "Subscribe" for You?

Leading brokerages have expressed optimism regarding the company's long-term prospects. Choice Broking and Anand Rathi have both recommended a "Subscribe" rating for the long term. Analysts point to the company's integrated manufacturing model and its expansion into international markets, including a joint venture in Mexico, as key growth drivers.

However, investors should remain mindful of potential risks, including global economic slowdowns, customer concentration, and fluctuations in foreign exchange rates. At the upper price band, the IPO is valued at approximately 22.4 times FY26 earnings, which experts consider a fair valuation given the company's growth profile.

Key Takeaways

  • Strong Demand: The IPO is subscribed 8.34x overall, led by heavy interest from Non-Institutional Investors (23.53x).
  • Positive Listing Outlook: A 17% GMP suggests the stock could list around ₹198, providing potential immediate gains.
  • Growth-Oriented Use of Funds: The majority of the fresh issue (₹320 crore) is earmarked for capacity expansion in Gujarat to support future demand.