Bai Kakaji Polymers IPO Analysis: A Plastic Cap & Material Provider, Should You Invest?

As industrial & consumption demand grow, Bai Kakaji stands as a polymer player, catering to different industrial applications & usage.

Let’s explore this upcoming IPO further:

Bai Kakaji Polymers' share price will be finalised post-allotment, while grey market cues through the Bai Kakaji Polymers IPO GMP will likely reflect market sentiment closer to listing.

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The Indian plastic industry has advanced significantly over the past few decades, becoming one of the nation’s significant sectors. Currently, the Indian plastic processing industry caters to a wide range of products and industries. Traditional materials are being quickly replaced by plastic technology and its cost-effective manufacturing.

The Indian Plastic industry, valued at $46.7 billion in FY25, is expected to grow at a CAGR of 6.14% till FY30.

Plastics were almost unknown until the 1920s in India, but are now found in every part of our daily lives. There are wide variety of plastic material types such as polyethene, PVC, HDPE, acrylic, etc. 

Apart from that, the Indian plastic industry comes with its own set of challenges and growth drivers listed below: 

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Originating in 2013 with a single machine for the manufacturing of plastic closures, Bai Kakaji is a Maharashtra-based manufacturer of PET preforms, Plastic caps, and closures. These are basically parts of packaging used in various consumer products such as packaged drinking water, carbonated beverages, juices, and dairy products.

Bai Kakaji has 4 manufacturing units located in Latur, Maharashtra, spread over 33,000 sq. meters. The company conducts its sales primarily concentrated in regions of Maharashtra, Karnataka, Gujarat, Kerala and Andhra Pradesh, which together contribute around 90% of total revenue, highlighting a strong presence in western and southern India.

Let’s have clarity on the kind of products the company makes:

So, as mentioned above, Bai Kakaji is primarily involved in 2 product categories:

1. PET Preforms: These are produced using PET resin, supplied in various sizes to clients from packaged drinking water & carbonated soft drinks. To tell you the end usage of PET Preforms, they are basically moulded into plastic bottles by the bottle manufacturers according to their specific needs. 

       This category contributed around 67% to the topline in FY25.

2. Plastic Caps & Closure: Think of it as those small plastic caps we find on packaged drinking water bottles, juices, and dairy products. The company offers around 7 varieties under this category, such as short-neck water cap, CSD cap, Juice-cap single piece, etc. 

These are manufactured using HDPE, LDPE, and PP granules, and contributed around 20% to the topline in FY25.

What is the Raw Material Used?

The primary raw materials used by Bai Kakaji are HDPE, LDPE, PP granules & PET Resins, which are basically different types of plastics having different qualities and usage. The prices of these raw materials are directly linked with fluctuations in crude oil, which are currently at a low of USD 62/barrel as of December 2025.

The company sources them mainly from local indigenous suppliers (around 90%), while the rest are imported. Bai Kakaji has a low supplier concentration, with the top 10 suppliers representing around 95% of total raw material purchases.

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The company has 4 manufacturing units, located in Latur, Maharashtra. Out of these, UNIT 1&2 are used for Preforms, Unit 3 is used for making caps, while Unit 4 is used for both preforms and caps. 

The utilisation numbers in 6M FY26 are not annualised; they appear to be relatively low. Over the years, however, it can be observed that the company has been slightly increasing its overall utilisation, keeping it in a similar range for each particular unit. 

Despite the low increase in utilisation trend, the company has a slight room for an increase in utilisation and will be required to increase its capacity base in the coming time.

(It must also be noted that out of the IPO proceeds, the company will be using up to Rs 22Cr for CAPEX.)

Management + Promoter Holding

The company is guided by a team of seasoned leaders with extensive experience in the polymer industry. The Chairman & MD, Balkishan Mundada, and the whole-time director, Harikishan Mundada, each have around 30 years of expertise. 

The collective leadership and profound industry have driven both innovation and excellence in the making and marketing of our products.

While 2 out of 6 board members are independent directors, the governance ensures quality as the audit and remuneration committees are led by independent directors. 

From a control standpoint, the promoters hold a dominant 100% stake pre-issue. Post-IPO, this stake will dilute to 73.55%, but promoter influence will remain firmly intact, given their high base ownership and board control.

Financial Performance 

Topline has given a low growth at 9.2% CAGR from FY23 to FY25. Though the FY26 numbers have not yet been released, on the basis of 6 months of sales, FY26 is also expected to give a single-digit growth rate, which is not convincing from an investment point of view.

Margins jumped sharply, with EBITDA margin climbing from 5.2% in FY23 to 10.3% in FY25, and hitting 15% in the 6M FY25. That’s a big shift toward higher-value formulations and better cost control.

PAT margin improved by almost 5x in three years — from 1.5% (FY23) to 7.9% (6M FY25) — showing the operating leverage finally kicking in. The CFO has been positive, while the working capital days have risen considerably over the years to 83 days in FY25 from 50 days in FY23

D/E ratio, being low, has remained similar over the years, at 1.6x in 6MFY25. This signals lower leverage and improved cash generation.

ROE and ROCE stand at 41.2% and 25.7%, respectively. The financials witness a surge in ROE & ROCE, when compared to FY23, placing Bai Kakaji well above many listed peers. The company has also maintained its current ratio well over the years at around 0.7.

Peer Analysis

On the basis of peer analysis, it can be said that Bai Kakaji has an average quality of financials. The EBITDA & PAT margins are 15% and 7.9%, respectively. The return ratios of the company are higher than the industrial range, with ROE & ROCE at 41.2% & 25.7%, respectively.

In terms of valuation, Bai Kakaji lies in the fair range with a P/E ratio at 15.5x, while the EV/EBITDA stands at 15.5x.  However, it must be noted that the company has slightly higher borrowings, with a D/E ratio of 1.8.

Overall, in terms of margins and valuation, when compared to peers, it can be said that the company has a moderate level of financials, requiring focused efforts by the management. 

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The company will be using the proceeds for:

• Funding the Capital expenditure requirements of the company.

• Repayment/prepayment, in full or part, of all or certain outstanding borrowings

• General Corporate Purposes

Overall, the issue aims to strengthen Bai Kakaji’s manufacturing capacity while improving its financial flexibility. The combination of expansion and deleveraging positions the company for more sustainable future growth.

Final Words

At Alpha Venture X Fund, we assess opportunities through our LMVT framework — Leadership, Moat, Valuation, and Tailwinds — enabling us to identify scalable businesses with durable fundamentals.

Leadership: Founder-led with strong industrial experience and equity retention, ensuring aligned execution and focus on scaling the refurbishment business.

Moat: Despite having in-house manufacturing, the company lacks a moat relative to its competitors, putting it at risk in terms of expansion. 

Tailwinds: Consumption expansion and sustained preference for plastic-based closures and bottles, along with government PLI schemes for small-scale manufacturers.

Valuation: The valuation is in the fair range in terms of PE at 15.5x; the EV/EBITDA ratio is also in the fair industrial range at 15.1x. 

Bottom Line: Bai Kakaji has slow topline growth and lacks a moat relative to its competitors. In terms of financials, the company has an average score. The valuation is also not attractive, being in a fair range. Bai Kakaji is not a buy for investment purposes.

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