Knack Packaging is significantly dependent on its top 10 suppliers for raw materials and does not have long-term contracts with them. Its largest supplier contributed 35.78% of total raw material purchases in Fiscal 2026, with the top 10 suppliers accounting for 86.21%. Loss of any key supplier or supply disruption could materially impact manufacturing schedules, business operations and financial performance.

A substantial portion of revenue is derived from existing customers without contractual arrangements. The Customer Continuity Rate was 93.75% in Fiscal 2026 while the top 10 customers contributed 40.87% of revenue from operations. Loss of key recurring customers or any decline in repeat orders could adversely affect turnover, margins and the long-term sustainability of operations.

All four manufacturing facilities of the Company are concentrated in a single region — the state of Gujarat — exposing it to risks from social, political, economic, regulatory or natural disruption specific to that region. Any shutdown or adverse condition in Gujarat could disrupt operations and materially impact business, financial condition and cash flows.

The Company has significant dependence on customers located in the United States, with 23.66% of total export revenue (and 15.18% of overall revenue) in Fiscal 2026 attributable to US customers. Adverse changes in US bilateral relations, trade restrictions, tariffs or taxation policies, or economic disruption in the US, may adversely affect exports, results of operations and financial condition.

The estimated cost of the proposed Project has been revised down from ₹5,148.94 million to ₹3,649.56 million, and the implementation schedule extended from December 2026 to October 2027. Further changes in project cost, delays, or cost overruns may adversely affect the expected benefits from the Project and the Company's financial performance and growth prospects.

The Company requires various approvals, NOCs, licences, registrations and permits in the ordinary course of business, certain of which (for Unit-3 and Unit-4) are held by lessors Praspack Polymers and Multipack Polymers rather than the Company. Failure to obtain or renew such approvals, or any termination of underlying lease arrangements, may disrupt operations and adversely affect business performance.

The Company's statutory auditors have made Emphasis of Matters in the audit reports for Fiscal 2025 and Fiscal 2024, noting that the consolidated/special purpose consolidated financial statements were prepared solely for inclusion in the DRHP. Future audit reports may contain similar qualifications, observations or emphasis of matters, which could adversely impact stakeholder perception.

The Registered and Corporate Office and all manufacturing facilities are located on leased premises obtained from the Promoters and members of the Promoter Group, creating potential conflicts of interest in lease negotiation, renewal and enforcement. Unfavourable renewal terms or termination of these leases could disrupt operations and adversely affect the business.

The Company extends credit facilities to customers (typically 60–90 days for export sales and 30–60 days for domestic sales), exposing it to counterparty risks. Trade receivables stood at ₹1,382.99 million in Fiscal 2026 (16.80% of revenue from operations), and any delay or default in collection could adversely impact working capital, cash flows and financial condition.

Lenders hold a charge over the Company's movable and immovable properties securing its borrowings, backed by personal guarantees from Promoters and Directors. Total borrowings stood at ₹1,924.70 million as on March 31, 2026. Any inability to meet repayment obligations, or breach of loan covenants, could allow lenders to enforce security and materially impair business continuity.