K.K. Emulsions Limited IPO

01At a glance

What the company does: makes water-based adhesives, hot melt adhesives, binders, paint binders, sticker and tape adhesives and wood adhesives at Khardah, West Bengal, partly through contract manufacturers, and separately trades specialty chemicals such as acrylate monomers, styrene and butanol (DRHP p.183, DRHP p.184).

Who pays it: customers in packaging, printing, woodworking, textiles and construction. The document does not disclose customer concentration on the pages read, and names no customer (DRHP p.181, DRHP p.188).

Why it is raising money: ₹1,067.22 lakh to build a factory on land to be leased at Jaipur, ₹273.66 lakh to pay the balance on that land to the Rajasthan State Industrial Development and Investment Corporation, ₹256.75 lakh towards incremental working capital, and general corporate purposes capped at 15% of gross proceeds or ₹1,000 lakh, whichever is less (DRHP p.126, DRHP p.127).

How fast it has grown: revenue from ₹5,040.80 lakh in FY24 to ₹6,783.76 lakh in FY25 and ₹7,288.23 lakh in FY26, about 20.2% a year, and profit after tax from ₹158.17 lakh to ₹449.23 lakh, about 68.5% a year (our arithmetic, DRHP p.149).

The one thing to understand: the plant is past its rated capacity. Overall utilisation was 78.70% in FY24, 89.41% in FY25, 98.50% in FY26 and 118.45% in the June 2026 quarter, and the factory the issue funds is 1,900 kilometres away in Jaipur (DRHP p.126, DRHP p.214).

02The business, in plain words

A carton maker needs glue that will bond printed board to film. A paint company needs the acrylic binder that holds pigment to a wall. Both are water-based acrylic emulsions, cooked in a reactor to a formulation, filled and shipped. Alongside that, the company buys and resells the monomers and solvents that go into such formulations, without processing them.

A packaging or paint customer orders a formulation → the company procures acrylate monomers, styrene and solvents → it reacts and emulsifies them in one of five reactors at Khardah, or gives the job to a contract manufacturer with its own raw material → quality control tests it → the product is filled, packed and despatched.

The company was incorporated in October 2012 as K.K. Dugar Real Estate Private Limited, renamed K.K. Emulsions Private Limited in 2014, began manufacturing water-based adhesives, binders and emulsions in 2017, started exporting in 2019, added trading and new product lines in 2022, and became a public limited company in 2026 (DRHP p.235). It holds 53.28% of KKHEM Resins & Adhesives Private Limited, its only subsidiary (DRHP p.235). It had 19 employees on its payroll and 6 contractual workers at June 30, 2026, of whom two are in research and quality control (DRHP p.207, DRHP p.218).

Earnings equation: Profit ≈ kilograms sold × realisation − monomers, solvents and packing − reactor and plant cost − freight − interest on the receivables. Transport alone was 5.14%, 4.68% and 4.65% of total expenses across FY24 to FY26 (DRHP p.218).

03Where the money comes from

Source: DRHP p.184, DRHP p.316. The manufacturing row is our arithmetic, the total less trading.

Trading is the faster-growing half and the thinner one. Its share of revenue went from 22.80% in FY24 to 27.48% in FY26, and within trading, bond-to-bond sales, the transfer of goods between bonded warehouses, went from 31.07% of trading revenue in FY24 to 63.93% in FY26 and 90.75% in the June 2026 quarter (DRHP p.184). The profit contribution from trading was 1.84%, 1.77% and 3.13% of trading revenue across FY24 to FY26, and 11.35% in the June quarter (DRHP p.184).

The prospectus does not disclose revenue by customer, or the share taken by the largest customers, on the pages read, and names no customer. What it does disclose is the traded product list: butyl acrylate monomer, ethyl acrylate monomer, styrene monomer, normal butanol, toluene, methyl methacrylate, iso butanol, acrylic acid and vinyl acetate monomer, all of them crude-oil linked (DRHP p.185, DRHP p.316).

04The growth record

Source: DRHP p.149, DRHP p.317. FY24 and FY25 are standalone and FY26 and the quarter are consolidated, because the subsidiary came in during FY26; the quarter's figures are not annualised.

Our arithmetic over FY24 to FY26: revenue grew about 20.2% a year, operating EBITDA about 61.7% and profit about 68.5%; EBITDA margin rose 409 basis points and PAT margin 302 basis points (DRHP p.149). Return on capital employed went the other way, from 46.59% in FY24 to 36.56% in FY25 and 35.09% in FY26, as the capital base grew faster than earnings (DRHP p.149).

Earnings a share, as the prospectus computes them, were ₹1.60 in FY25 and ₹4.25 in FY26, and net asset value a share ₹26.67, ₹40.43 and ₹10.91 across the three years, the fall in FY26 being the 5 for 1 bonus issue rather than a loss of value (DRHP p.145, DRHP p.147).

05What the growth is made of

Volume in the plant and mix in the trading book. Actual production rose from 46,38,066 kilograms in FY24 to 51,36,918 kilograms in FY25 and 56,00,132 kilograms in FY26, and 15,70,950 kilograms in the June 2026 quarter alone (DRHP p.214). Reactor-days used rose from 1,405 to 1,596 to 1,758 against 1,785 available, and then to 521 against 440 available in the June quarter, which is how overall utilisation reached 118.45% (DRHP p.214).

The margin improvement came from both halves. Manufacturing revenue rose from ₹3,891.62 lakh in FY24 to ₹5,285.80 lakh in FY26 on 20.7% more kilograms, so realisation rose too (our arithmetic, DRHP p.184, DRHP p.214). Trading profit rose from ₹21.14 lakh to ₹62.63 lakh as its margin went from 1.84% to 3.13% (DRHP p.184).

One product line moved sharply: paint binder production went from 3,950 kilograms in FY24 and 6,720 in FY25 to 34,080 in FY26 and 1,20,475 in the June 2026 quarter, though it remains a small part of a 9,28,200-kilogram annual capacity on that line (DRHP p.214). The document does not disclose realisation by product, so the rest of the mix effect cannot be separated.

06Earnings quality

Two items need explaining. First, the trade payables fall: payables dropped ₹252.22 lakh while revenue rose, which the company puts down to early payment to keep supply and secure favourable terms, and which improved the payables turnover from 11.74 to 13.48 times (DRHP p.320). Paying suppliers sooner uses cash, and the working-capital object is what replaces it. Second, the subsidiary: ₹365.00 lakh was still payable for its shares at March 2026, its long-term borrowings of ₹569.80 lakh came onto the consolidated balance sheet, and FY26 is therefore the first consolidated year against two standalone ones (DRHP p.320).

07The balance sheet

The restated balance sheet tables in the copy read are images that do not extract as text; what follows is from the management discussion chapter, which prints the same lines (DRHP p.320).

At March 31, 2026, on a consolidated basis, long-term borrowings were ₹569.80 lakh against ₹10.31 lakh a year earlier, the increase being the subsidiary's own borrowings brought in on consolidation; short-term borrowings ₹704.30 lakh against ₹579.43 lakh; trade payables ₹315.32 lakh against ₹567.54 lakh; and other current liabilities ₹385.74 lakh against ₹6.50 lakh, of which ₹365.00 lakh is payable for the subsidiary's shares (DRHP p.320).

On the asset side, inventories were ₹533.38 lakh, trade receivables ₹1,046.99 lakh, short-term loans and advances ₹165.14 lakh and other current assets ₹207.92 lakh (DRHP p.320). Net worth was ₹1,129.54 lakh at March 2026 and ₹1,729.12 lakh at June 2026, the rise being the ₹362.36 lakh rights issue of May 2026 plus the quarter's profit (our arithmetic, DRHP p.109, DRHP p.149).

There are no contingent liabilities and no commitments at any of the four dates (DRHP p.82). Creditors at June 30, 2026 numbered 34, owed ₹911.67 lakh between them, of which ₹281.24 lakh is owed to 15 micro, small and medium enterprises (DRHP p.347). The securities premium account is nil before the offer, because every allotment has been at par or by bonus except a ₹5 premium in 2019 (DRHP p.103, DRHP p.108).

After the offer: 39,65,328 new shares take the count from 1,39,76,550 to 1,79,41,878; at the stated total project cost of ₹1,594.19 lakh of working capital, ₹375.88 lakh of land and ₹1,127.12 lakh of construction, the issue funds ₹1,597.63 lakh of that and the rest comes from accruals and borrowings (our arithmetic, DRHP p.103, DRHP p.126).

08What the money is for

Source: DRHP p.126, DRHP p.127. ₹102.22 lakh of the land cost and ₹59.90 lakh of the construction cost have already been spent (DRHP p.126). The land balance of ₹273.66 lakh is owed to the Rajasthan State Industrial Development and Investment Corporation, payable on instalments, with interest served from internal accruals until the issue proceeds arrive (DRHP p.127). The project cost has been certified by a chartered engineer and the working-capital figure by the statutory auditor, but the requirement and deployment have not been appraised by any bank or financial institution (DRHP p.127).

Into the business the proceeds of up to 39,65,328 new shares, not priced at draft stage (DRHP p.125). To selling shareholders the proceeds of up to 9,66,672 shares: Kamal Kumar Dugar 5,78,672, Mohan Lal Dugar 1,94,000 and Suraj Dugar 1,94,000 (DRHP p.355).

09Who is selling

Source: DRHP p.120, DRHP p.355. The last column is our arithmetic. The fourth promoter, Anjana Dugar, who holds 10.37%, is not selling (DRHP p.120). Between them the three sellers are offering 9,66,672 of the 1,25,24,730 shares they hold, 7.72% of their holding (our arithmetic, DRHP p.120, DRHP p.355). The offer for sale is 19.60% of the total offer of 49,32,000 shares (our arithmetic, DRHP p.102).

10Promoters

The promoters are Kamal Kumar Dugar, aged 52, Managing Director; Mohan Lal Dugar, aged 76, Whole-time Director; Suraj Dugar, aged 70, Whole-time Director; and Anjana Dugar, aged 48 (DRHP p.266, DRHP p.267, DRHP p.268). All four give the same residential address in Kolkata (DRHP p.266, DRHP p.268). Together they hold 1,39,74,750 shares, 99.99% of the capital (DRHP p.266). There has been no change in the management or control of the company in the five years before the filing (DRHP p.268).

Promoter economics, from the capital structure chapter (DRHP p.107, DRHP p.108, DRHP p.109): the company was funded by five rights issues between 2015 and 2019, four of them at ₹10 a share and the last at ₹15; then a 9 for 20 bonus issue in March 2021; then a 5 for 1 bonus issue on March 31, 2026 which created 86,27,500 shares out of reserves; then a rights issue of 36,23,550 shares at ₹10 on May 25, 2026, subscribed by Kamal Kumar Dugar for 21,74,130 shares and Anjana Dugar for 14,49,420.

The stated weighted average cost of acquisition over the last three years is ₹3.87 a share for Kamal Kumar Dugar, ₹10.00 for Anjana Dugar and nil for Mohan Lal Dugar and Suraj Dugar, whose shares in that window came only through the bonus (DRHP p.120).

The prospectus records no criminal, civil, regulatory or tax proceeding of any kind against the promoters, and no SEBI or exchange action against them (DRHP p.345, DRHP p.346).

11Who already owns it

Source: DRHP p.120. The company had seven shareholders at the date of the filing (DRHP p.124). There is no private equity, no venture capital, no institution, no employee stock option scheme and no convertible instrument (DRHP p.103, DRHP p.265). On full allotment the count rises to 1,79,41,878 shares; after the offer for sale of 9,66,672 shares the promoters would hold about 72.5% (our arithmetic, DRHP p.103, DRHP p.355). The offer is at least 25% of the post-offer capital, as the rules for this route require (DRHP p.124).

12What changed just before the IPO

• A 5 for 1 bonus issue on March 31, 2026 turned 17,25,500 shares into 1,03,53,000, out of reserves as at March 31, 2026 (DRHP p.107, DRHP p.109).
• A rights issue at par on May 25, 2026 added 36,23,550 shares at ₹10, taken up by Kamal Kumar Dugar and Anjana Dugar, bringing in ₹362.36 lakh (DRHP p.109).
• A subsidiary was bought. The company holds 53.28% of KKHEM Resins & Adhesives Private Limited, with ₹365.00 lakh still payable for the shares at March 2026 (DRHP p.235, DRHP p.320).
• The company became a public limited company in 2026 (DRHP p.235).
• Profit almost trebled, from ₹158.17 lakh in FY24 to ₹449.23 lakh in FY26, while revenue rose 44.6% (our arithmetic, DRHP p.149).
• The plant went past its rated capacity, from 78.70% utilisation in FY24 to 98.50% in FY26 and 118.45% in the June 2026 quarter (DRHP p.214).
• Trading grew and changed shape: bond-to-bond sales went from 31.07% of trading revenue in FY24 to 90.75% in the June 2026 quarter (DRHP p.184).
• The statutory auditor changed on February 5, 2026: Rahul Goenka & Associates, auditors since January 3, 2023, made way for Jain Sonu & Associates, the reason given being pre-occupation in other assignments (DRHP p.90).
• Authorised capital was raised twice, to ₹15 crore in February 2026 and to ₹22 crore in June 2026 (DRHP p.106).
• Suppliers were paid down. Trade payables fell 44.44% in FY26 while revenue rose (DRHP p.320).

13Capacity and expansion

Source: DRHP p.214, certified by Er. Debabrata Ghosh, chartered engineer. Installed capacity is computed on two twelve-hour shifts a day and six working days a week, and is weighted across product lines: 12,85,200 kilograms a year for tape adhesive, 9,99,600 for binder, 9,28,200 each for paint binder, sticker adhesive and adhesives, and 3,57,000 for hot melt (DRHP p.213, DRHP p.214).

The expansion is a new factory on leased land at Jaipur, Rajasthan, for ₹1,127.12 lakh of construction on ₹375.88 lakh of land, with ₹162.12 lakh already spent (DRHP p.126). The prospectus does not state the new plant's capacity in kilograms, its commissioning date, or why Jaipur rather than a second line at Khardah, where the existing plant is.

14Market size and industry structure

The industry chapter of this filing is among the sections that do not extract as text in the copy read, so no market size figure is quoted here. What the document says in its own business and risk chapters is the following.

As claimed: the company describes customers in packaging, printing, woodworking, textiles, construction and other industrial applications, and a locational advantage for its Khardah facility (DRHP p.188, DRHP p.235).

The part that is addressable: water-based adhesives, binders, emulsions and allied specialty chemicals sold to industrial users, with exports since 2019 (DRHP p.235).

What the company is today: ₹7,288.23 lakh of FY26 revenue, one plant of five reactors, 19 employees on the payroll and 6 contractual workers (DRHP p.149, DRHP p.214, DRHP p.218).

On structure, the document names the factor that matters most for this business: raw material prices are crude-oil linked, and it lists the impact of geopolitical conflict on crude-linked raw material prices among the factors affecting its results (DRHP p.319). Every traded product it lists, from butyl acrylate to toluene, is a petrochemical derivative (DRHP p.185).

15Competitive position

Source: DRHP p.147. The company's figures are for the June 2026 quarter, annualised for comparison; the peers' are for the year to March 31, 2026, at market prices of August 20, 2026.

What the company offers, on its own account: a diversified product portfolio with new product development, manufacturing through both its own plant and contract manufacturers, quality control supported by an in-house laboratory, the location of the Khardah facility, and established customer relationships (DRHP p.188). Against that: 19 employees, two of them in research and quality control; a plant already over its rated capacity; no disclosed customer concentration to test the strength of those relationships; and a trading arm that earned a 3.13% margin in FY26 (DRHP p.184, DRHP p.207, DRHP p.214).

16Peers the company named

Peers named in the offer document: Sonal Adhesives, SPEB Adhesives and Jyoti Resins & Adhesives (DRHP p.147).

All three are listed Indian adhesives makers, so the set is apt by activity, but the spread of size is wide: Jyoti Resins & Adhesives earned ₹7,031.00 lakh of profit in FY26 against this company's ₹449.23 lakh for the full year, and Sonal Adhesives ₹138.37 lakh (DRHP p.147, DRHP p.149). At prices of August 20, 2026 they traded at 14.65, 18.13 and 24.45 times FY26 earnings, a median of 18.13 (DRHP p.147). The company adds that, given its nature and turnover, the peers are not strictly comparable and are included for broader comparison (DRHP p.147).

One inconsistency is worth recording. The industry price to earnings box in the same chapter gives the highest as 171.72, the lowest as 17.87 and the average as 19, none of which matches the three peers in the table below it, which range from 14.65 to 24.45 (DRHP p.146, DRHP p.147). The document does not reconcile the two.

17Risks, in plain words

A plant past its limit: overall utilisation was 98.50% in FY26 and 118.45% in the June 2026 quarter on five reactors (DRHP p.214) → volume cannot grow at Khardah without more reactors → the expansion the issue funds is a new factory in Rajasthan, and the document gives no commissioning date.

Crude-linked input prices: every traded product and every raw material the company names is a petrochemical derivative, and it lists geopolitical effects on crude-linked raw material prices among the factors affecting results (DRHP p.185, DRHP p.319) → adhesive prices follow monomer prices with a lag → operating margin was 4.89% as recently as FY25 (DRHP p.149).

A trading book on thin margins: trading was 27.48% of FY26 revenue at a 3.13% profit margin, and 90.75% of the June quarter's trading was bond-to-bond sales (DRHP p.184) → trading adds revenue without much profit and ties up working capital → its margin was 1.77% in FY25.

A new subsidiary and new debt: ₹569.80 lakh of long-term borrowings came onto the consolidated balance sheet with KKHEM Resins & Adhesives, and ₹365.00 lakh was still payable for its shares at March 2026 (DRHP p.320) → FY26 is the first consolidated year, so FY24 and FY25 are not comparable → the company holds 53.28%, so there is a minority alongside.

Customer disclosure: no customer is named and no concentration figure appears on the pages read (DRHP p.188) → a reader cannot test how much revenue rests on how few relationships → the company describes established customer relationships as a strength without quantifying them.

A very small organisation: 19 employees on the payroll and 6 contractual workers run a business with ₹7,288.23 lakh of revenue, with two people in research and quality control (DRHP p.207, DRHP p.218) → key-person dependence is high → all four promoters share one address and three of them are on the board.

A register of seven: the promoters hold 99.99%, the capital was multiplied by a 5 for 1 bonus in March 2026 and topped up by a rights issue at par in May 2026 (DRHP p.107, DRHP p.109, DRHP p.266) → the entire pre-issue capital structure is six months old → after the offer the promoters would still hold about 72.5%.

Offer-specific: the fund requirement has not been appraised by any bank or financial institution, the general corporate purposes amount is left blank, 19.60% of the offer goes to three of the four promoters, and there is no price band (DRHP p.102, DRHP p.127, DRHP p.355).

18Litigation and regulatory matters

The section is empty in every category the regulations require. The materiality threshold applied is ₹12.95 lakh, being 5% of the average of the absolute profit or loss after tax of the last three years, which is the lowest of the three tests (DRHP p.344). Outstanding dues at June 30, 2026 were ₹911.67 lakh to 34 creditors, of which ₹281.24 lakh is owed to 15 micro, small and medium enterprises and ₹630.43 lakh to 19 others; a creditor owed more than ₹45.58 lakh is treated as material (DRHP p.344, DRHP p.347).

19Related-party transactions

The summary of related party transactions in the copy read is among the tables that do not extract as text (DRHP p.83).

What the document states elsewhere is that no loan has been availed by any key managerial personnel from the company, that there is no understanding with major shareholders, customers or suppliers under which any key managerial personnel was recruited, and that there was no contingent or deferred compensation accrued for any of them for the year to March 31, 2026 (DRHP p.262, DRHP p.265).

The one related-party item that appears in the financial commentary is the acquisition of the subsidiary: ₹365.00 lakh remained payable for the shares of KKHEM Resins & Adhesives Private Limited at March 31, 2026, and that payable is the bulk of the rise in other current liabilities from ₹6.50 lakh to ₹385.74 lakh (DRHP p.320). Three of the four promoters are also whole-time or managing directors and are paid as such (DRHP p.266, DRHP p.267).

20What the offer document does not say

Customer concentration is not disclosed on the pages read, and no customer is named, so the largest relationship cannot be sized. Realisation for each kilogram, by product, is not given, so the margin improvement cannot be separated into price, mix and input cost. The new Jaipur factory's capacity, in kilograms or reactors, is not stated, nor is its commissioning date, nor why Rajasthan rather than an expansion at Khardah.

The subsidiary KKHEM Resins & Adhesives is not broken out: its revenue, profit and the price paid for the 53.28% stake do not appear in the pages read. The industry chapter, the summary financial statements, the summary related-party table and the restated balance sheet are printed as images in the copy read and do not extract as text.

The peer price to earnings box gives a highest of 171.72 and an average of 19 that do not match the three peers the same chapter names. The general corporate purposes amount and the offer expenses are left blank, and there is no price band.

21Five questions for management

1. What share of FY26 revenue came from the largest customer and the largest five, and how long have those relationships run?
2. What capacity, in kilograms a year, will the Jaipur factory add, when will it commission, and what utilisation does it need to cover its own depreciation?
3. What was paid for the 53.28% of KKHEM Resins & Adhesives, what does that company earn, and what are the ₹569.80 lakh of borrowings it brought in?
4. Why did the trading margin move from 1.77% in FY25 to 3.13% in FY26 and 11.35% in the June quarter, and what is a normal margin on bond-to-bond sales?
5. How did the plant run at 118.45% of rated capacity in the June quarter, and what is the sustainable limit at Khardah on five reactors?

1Sources and cited facts

This study was read from 1 document the company filed. The 87 figures it cites are listed under the document each came from, with the page and the sentence as printed.