Knack Packaging IPO Lists At 10% Premium; Shares Beat Grey Market Estimates

Knack Packaging made a healthy stock market debut on Wednesday, listing at a premium of over 10% on both the NSE and BSE after its initial public offering (IPO) attracted strong investor demand and was subscribed 83.33 times.

The Ahmedabad-based packaging solutions provider listed at ₹188 per share on the NSE, a premium of 10.59% over its issue price of ₹170. On the BSE, the stock debuted at ₹186, up 9.41% from the upper end of the price band.

At around 12:22 pm, the stock was trading at ₹186.76 on the NSE, while the company's market capitalisation stood at ₹2,275.99 crore.

The listing was better than grey market expectations and rewarded successful IPO applicants with listing gains.

With a lot size of 88 shares, investors allotted one lot saw the value of their investment rise to ₹16,544 from ₹14,960 at the issue price, translating into a gain of ₹1,584 per lot at the NSE listing price.

IPO Attracted Strong Institutional Demand

Knack Packaging's ₹439.5-crore IPO comprised a fresh issue of equity shares worth ₹380 crore and an offer for sale (OFS) worth ₹59.5 crore by existing shareholders. The public issue was priced in the range of ₹161-170 per share and remained open for subscription between July 1 and July 3.

Ahead of the issue opening, the company raised ₹131.25 crore from anchor investors.

The IPO received an overwhelming response across investor categories, with the overall issue subscribed 83.33 times.

Qualified Institutional Buyers (QIBs) led the demand, subscribing their reserved portion 154.34 times. The non-institutional investor (NII) segment was subscribed 139.81 times, while the retail investor quota was booked 20.07 times.

Expansion Plans And Brokerage View

The company plans to utilise the proceeds from the fresh issue to establish a new manufacturing facility at Borisana in Gujarat's Mehsana district. The remaining funds will be used for general corporate purposes.

Knack Packaging manufactures customised printed and laminated woven polypropylene (PLWPP) bags and pinch-bottom bags used across industries such as food products and pet food packaging.

Commenting on the listing, Shivani Nyati, Head of Wealth at Swastika Investmart, said the company delivered a healthy market debut that exceeded grey market expectations.

She attributed the positive response to the company's strong revenue growth, improving profitability, healthy return ratios and integrated manufacturing capabilities.

However, Nyati cautioned that investors should monitor customer concentration risks and the execution of the company's upcoming manufacturing facility, which will be critical for sustaining future growth.

She recommended that investors who received allotment continue holding the stock for potential further upside while maintaining a stop-loss at ₹175. Fresh investors, she added, may consider accumulating the stock on declines after assessing the company's upcoming quarterly performance.