Kahan Packaging LTD. IPO - Review, Valuation, Date & GMP

Kahan Packaging Limited - Complete Overview

Established in the year 2016, Kahan Packaging Limited specializes in providing tailored bulk packaging solutions to B2B manufacturers across various industries, including the Agro Pesticides, Cement, Chemical, Fertilizer, and Food Products sectors.

The company is engaged in the manufacturing and supply of a wide range of products, including Polypropylene (PP)/High Density Polyethylene (HDPE) Woven Fabric - Laminated, HDPE/PP woven sacks, Woven Fabric - UnLaminated, PP Woven Bags, PP Woven Bags with Liners, Printed Laminates for Flexible Packaging, as well as various woven polymer-based products. These products come in diverse weights, sizes, and colors, tailored to meet customer specifications.

All of these products are manufactured in-house at the company's production facilities. Factory-I, located in Asangaon, Maharashtra, has an installed production capacity of 2,600 metric tons per annum for woven fabrics.

Moreover, the company has expanded its operations by establishing a new manufacturing unit and installing a Multi-color (up to 8 colors) Roto Gravure Printing Machine for flexible packaging and printing. This includes the printing of materials such as polyester, Nylon, BOPP, Foil, low and high-density polyethylene, polypropylene, and paper, with two-sided printing capabilities, complemented by high-speed hot air dryers. The new unit has an installed production capacity of 500 metric tons per annum.

As of December 31, 2022, the company has generated a revenue of Rs. 1,352.58 lakhs.

 

What does the company do?

Kahan Packaging Limited specializes in providing tailored bulk packaging solutions to B2B manufacturers across various industries, including the Agro Pesticides, Cement, Chemical, Fertilizer, and Food Products sectors.

 

 

Company Products

The company's product line includes Polypropylene (PP)/High-Density Polyethylene (HDPE) Woven Fabric - Laminated, HDPE/PP woven sacks, Woven Fabric - UnLaminated, PP Woven Bags, PP Woven Bags with Liners, Printed Laminates for Flexible Packaging, as well as various woven polymer-based products.

 

IPO Overview

The Kahan Packaging Limited IPO date has been scheduled for September 6th to September 8th, 2023. This upcoming SME IPO is offering shares at a price of Rs.80 per share. 

The company aims to raise Rs.5.76 Crores from this issue to fulfil certain objectives. The listing of Kahan Packaging Limited IPO is anticipated to take place on September 18, 2023.

For comprehensive details about the IPO, you can explore the Finowings IPO section to access all the relevant information.

 

Kahan Packaging Limited IPO timetable (Tentative)

Events	Date
IPO Opening Date	6 September 2023
IPO Closing Date	8 September 2023
IPO Allotment Date	13 September 2023
Refund initiation	14 September 2023
IPO Listing Date	18 September 2023

 

Kahan Packaging Limited IPO Details

IPO Opening & Closing Date	6 September to 8 September 2023
Face value	Rs.10 per share
Issue Price	Rs. 80 per share
Lot Size	1600 Shares
Price of 1 lot	Rs.128,000
Issue Size	720,000 shares (aggregating up to Rs.5.76 Cr)
Offer for sale	NA
Fresh issue	720,000 Share (aggregating up to Rs. 5.76 Cr)
Listing at	BSE SME
Issue Type	Fixed Price Issue IPO
Registrar	Purva Sharegistry India Pvt. Ltd.

 

Kahan Packaging Limited IPO Lot Details

Minimum Lot Investment (Retail)	1 Lot
Maximum Lot Investment (Retail)	1 Lot
Minimum Lot Investment (HNI)	2 Lot

 

Kahan Packaging Limited IPO Reservation

Other Investors Share Portion	50%
Retail Investors Share Portion	50%

 

Company Financial

(Amount in Lakhs)

Period	31 Mar 2021	31 Mar 2022	31 Dec 2022
Total Assets	898.33	975.15	1272.59
Total Revenue	1212.81	1590.63	1352.86
PAT	1.57	19.77	57.35
Net Worth	49.75	69.53	126.88
Reserve & Surplus	-0.25	19.53	76.88
Total Borrowings	442.29	616.58	713.93

 

Product-wise Revenue

(Amount in Lakhs)

Product Names	December 31, 2022	FY 2021-22	FY 2020-21
PP Woven Fabric	1324.58	1483.92	1117.35
PP Woven Bag	1.59	74.77	67.71
Scrap	14.85	23.40	16.98
Others	11.56	5.86	9.74
Total	1352.58	1587.95	1211.78

 

Objective of the Issue

The company aims to utilize the funds to fulfil the following objectives:

• Addressing working capital needs.
• Fulfilling general corporate purpose.

 

Promoters and Management of Kahan Packaging Limited

Mr Prashant Jitendra Dholakia and Mr Rohit Jitendra Dholakia are the key promoters of the Kahan Packaging Limited.

Pre-issue Promoter Shareholding	99.95%
Post-issue Promoter Shareholding

 

Peer Comparison

According to the Kahan Packaging DRHP, the following are the listed peers of the company.

Company Name	EPS (Rs.)	PE	Total Income (Rs. in Lakhs)
Kahan Packaging Limited	1.98	-	1,590.63
Sah Polymers Limited	2.81	34.82	8,123.45
Rishi Techtex Limited	1.78	14.37	10,108.44
Uflex Ltd	30.79	13.38	5,72,059.45

 

IPO's Valuations

Kahan Packaging IPO price is Rs 80 per share and the company's EPS as of March 31, 2022 is Rs 1.98. When using this provided data to evaluate the IPO valuation, the P/E ratio of the company is around 20.

 

Dividend Policy

The company does not have a formal dividend policy and has not distributed any dividends. Furthermore, the potential future payment of dividends depends on the company's financial performance.

 

IPO's Strengths

• Diverse Product Range.
• In-house Manufacturing Capabilities.
• Robust Connections with Customers and Suppliers.
• Experienced Management Team with Industry Knowledge and a Proven track record of Success.

 

IPO Weaknesses

• A significant portion of the company's revenue is derived from a limited number of customers.
• The company generates a substantial part of its sales from specific geographical regions.
• The majority of the company's revenue depends on a single business segment, namely woven fabrics.
• The company requires various approvals, licenses, registrations, and permits to operate its business.
• There have been certain inaccuracies in regulatory filings made with the RoC.
• Restated financial statements have been provided by chartered accountants who are not the statutory auditors of the company.
• The company operates in a price-sensitive industry where consumer purchasing decisions are highly influenced by product prices.
• The Company, its Promoters, and Directors are involved in certain legal proceedings.
• The company faces competition from well-established and larger competitors.
• The company has not received the lender's NOC to undertake the initial public offering of equity shares.
• Compliance with safety, health, environmental laws, and labour regulations may negatively impact the company's business.
• In the year preceding the Draft Prospectus, the company allocated Equity Shares at a price lower than the Issue Price.
• The Promoters of the company acquired Equity Shares at an average cost lower than the face value of Equity Share.
• The company has encountered negative operating cash flows in the past.
• The company holds unsecured loans that are repayable upon demand.

 

 

IPO GMP

Kahan Packaging IPO GMP is Rs. 75.

 

Conclusion

Kahan Packaging Limited operates within a competitive and price-sensitive industry. The company has previously faced challenges with negative cash flow. However, it's noteworthy that the company is currently demonstrating growth in its performance and is also pursuing expansion opportunities. Therefore, investors may find it worthwhile to consider applying for this issue following a comprehensive analysis.
 

 

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the DRHP.

 

 

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