Knack Packaging IPO Objects of the Issue

About Knack Packaging

Incorporated in March 2013 (converted to a public limited company in June 2025), based in Gujarat, Knack Packaging Limited is a leading, integrated, innovation oriented, and export led packaging solutions provider. It is promoted and led by Alpesh Tulsibhai Patel, Pravinkumar Ambalal Patel, and Rashminbhai Tulsibhai Patel.

The company caters to a highly diversified range of end user industries, including grains, pulses, spices, sugar, animal and pet foods, agrochemicals, fertilisers, cement, and building materials. Core Products Knack Packaging specialises in flexible plastic bulk packaging solutions (ranging from 5kg to 50kg).

The company core product portfolio includes:

Printed and Laminated Woven Polypropylene (PLWPP) Bags: Known for superior durability, strength, and high-quality printing

PLWPP Pinch Bottom Bags: Knack Packaging is the first company in India and Asia to provide laser cut and easy open features in these bags. These bags feature seamless construction, a brick like shape for stable stacking, and 6-sided branding capabilities.

PP Woven Bags: Designed for robust quality and breathability.

PLWPP Block Bottom and Bottom Gusset Bags: These offer a flat, stable base for easy stacking and support rigid handles.

Retail Shopping Bags: Gusseted and handled woven/non-woven bags that are ultrasonically sealed for enhanced durability

**The company also offers value added features like zippers, handles, transparent windows, micro perforations, as well as anti counterfeit protections like RFID tags, QR codes, barcodes, and holographic hot stamping

Operating under a B2B and B2C model, Knack Packaging serves top domestic and international brands across 71 countries spanning six continents. The company is heavily export oriented. In Fiscal 2026, exports accounted for 56.30% of its total revenue from operations, with major markets including the USA, Mexico, and South Africa. To bolster its international footprint, the company operates a wholly owned subsidiary in South Africa, Knack Packaging SA (RF) Proprietary Limited, and a joint venture in Mexico, Sayem Knack S.A. de C.V.

The company operates four manufacturing facilities (Unit-1, Unit-2, Unit-3, and Unit-4) located in Gujarat. It employs a vertically integrated manufacturing process that encompasses everything from polypropylene (PP) granule processing to tape extrusion, fabric weaving, rotogravure printing, lamination, and final bag finishing. As of March 2026, these facilities have an aggregate effective installed capacity of 43,300 Metric Tonnes Per Annum (MTPA), supported by a large workforce of 1,959 employees

Competetive Strength

Knack Packaging leverages several distinct strengths to maintain its competitive edge in the flexible packaging market:

Operational Efficiency through Digitised Processes: The company utilises a proprietary digital ecosystem called Knack Galaxy, which integrates and tracks procurement, production, dispatch, and logistics in real time. Combined with Microsoft CRM Dynamics 365 and SAP S4 HANA, this ecosystem ensures end-to-end visibility, reduces manual errors, and seamlessly connects internal teams, suppliers, and customers.

pability to Deliver Complex Product Designs with Accuracy: The company has advanced engineering capabilities to manage complex bag construction and multi-layer lamination. Utilising an in house ink kitchen and imported spectrophotometers, Knack Packaging ensures precise color matching and absolute consistency across print batches, which is critical for brands maintaining their visual identity.

Customer-Centric Custom Packaging Solutions: Knack provides end to end design services, including artwork creation and cylinder development

Diversified Geographic and Sector Presence: By exporting to 71 countries across six continents, the company significantly reduces its reliance on any single market, protecting it from region specific economic downturns or regulatory shifts.

Knack Packaging IPO Review

Strength

• Global Reach and Diversified Customer Base: The company has a strong export presence, catering to top brands in 71 countries across six continents, with significant export revenue driven by the USA, Mexico, and South Africa.
• Operational Efficiency and Vertical Integration: Knack Packaging operates a highly vertically integrated manufacturing process (from PP granules to finished bags). This is supported by its proprietary digital ecosystem, Knack Galaxy, which integrates with ERP systems for real-time tracking of procurement, production, and supply chain logistics.
• Customer-Centric Innovation and High Retention: The company provides end to end design services and acts as the custodian for over 73,000 printing cylinders developed for 1,950+ customers across 13,379 SKUs. This integrated service model creates high switching costs, resulting in a strong customer retention rate of 88.32% in Fiscal 2026.

Weaknesses & Risks

• Supplier and Customer Concentration: The company is significantly reliant on a few key suppliers without long term contracts. In Fiscal 2026, its top 10 suppliers accounted for 86.21% of total raw materials purchased. It is also highly dependent on repeating business from top customers without long term contractual commitments.
• Geographic Concentration: All four of the company’s existing manufacturing facilities are located in a single region (Gujarat), exposing its operations to region specific political, economic, or natural disaster risks.
• Heavy Reliance on the US Market: A significant percentage of its revenue, 23.66% in Fiscal 2026 is derived from customers in the United States. Any adverse shifts in US trade policies, tariffs, or macroeconomic slowdowns could materially impact its financial condition
• Contingent Liabilities: The company has unprovided contingent liabilities amounting to ₹31.48 crore, representing 10.22% of its net worth as of 31 March 2026, which, if materialised, could adversely affect its financial position.