Shri Krishana Overseas Limited (SKL) share price on 29th Monday September dropped 1.7% to KSh 8.08 from the previous KSh 8.22 traded on Friday. Nairobi Securities Exchange (NSE) investors reacted to the profit warning issued by the newly listed packaging company, which said end year earnings would drop by more than 25% due to its heavy debt load.
SKL did an IPO on July 24th 2025 with a share price of KSh 5.90 that has since appreciated 37%. SKL listed 50.9 million ordinary shares, at the price of KSh 5.90 per share. The firm floated 8.7 million shares at a listing valued at KSh 298M. The counter saw increased activity with 242,005 shares changing hands, the highest post-IPO trading volume, as the market priced in the negative news.
SKL’s profit warning is primarily attributed to higher finance costs associated with funding the Kisaju project. This significant increase in borrowing, from KSh 38.3 million to KSh150.2 million by June 2025, has raised concerns among investors.
The listed firm’s aggressive expansion plans, including construction of a new state-of-the-art plant in Kajiado, might be viewed positively in the long term, potentially driving growth and increasing production capacity to 24,000 tonnes of corrugated boxes.
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The substantial rise in borrowings could lead to liquidity risks, as highlighted in reports surrounding its NSE listing. “The market’s reaction to this news will largely depend on how investors perceive the company’s growth prospects versus the risks associated with increased debt,” said CFA Dedan Maina.
It is still unclear how investors will react to the profit-warning but analysts warn that it might drive negative or mixed sentiments, potentially affecting the share price. However, if investors believe in the company’s growth strategy and potential for long-term returns, the impact might be mitigated.
The listed packaging firm’s top shareholders include Nirmla Devi 25,250,000 shares or 50.00% shareholding, Sonvir Singh 24,725,000 shares or 48.96%, Bharat Singh 505,000 shares or 1.00%, Chandra Prakash, Dhannaram Yadav, Sushama Devi, and Jay Prakash 5,000 each or 0.01% shareholding.
According to an NCBA investment note, SKL listing on the NSE was to enhance the liquidity and visibility of its shares by tapping into the formal capital markets. The packaging dealer also sought to broadening its shareholder base by providing local and regional investors with an opportunity to participate in the company’s growth story.
SKL was also seeking to raise capital to support its expansion plans, including the development of its new manufacturing facility in Kisaju.
Revenue grew from KSh 130.25m in 2021 to KSh 309.86m in 2024. “However, this growth slowed sharply in 2024 to just 1.16%, suggesting SKL may be approaching near-term capacity limits ahead of the upcoming Kisaju plant expansion,” said Christopher A. Aura, an analyst at NCBA.
Shri Krishna Overseas PLC has shown strong financial recovery and expansion from 2021 through 2024. Despite modest revenue growth in 2024, margins improved significantly, leading to double-digit growth in profit and equity.
“With the upcoming increase in production capacity at Kisaju, the business is well positioned for its next phase of growth. The company’s listing on the NSE provides an added platform to unlock capital, enhance transparency, and accelerate its investment agenda,” said Aura.
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