The Nairobi Securities Exchange (NSE) today welcomed a significant new entrant to its Growth Enterprise Market Segment (GEMS) as Shri Krishana Overseas (SKL) officially listed under the ticker $SKL. Shares of the prominent Kenyan packaging company debuted at KSh 5.90, marking a pivotal moment not only for SKL but also for the broader landscape of Small and Medium-sized Enterprises (SMEs) in Kenya seeking access to vital capital for expansion. This listing, which sees SKL make 8.7 million of its 50.5 million ordinary shares available to the public, is a testament to the growing vibrancy of Kenya’s capital markets and its commitment to fostering local industrial growth.

The move by SKL, a rapidly growing player in Kenya’s packaging industry, underscores a strategic shift for mid-sized, founder-led businesses looking to leverage public markets for long-term sustainability and enhanced visibility. “Listing on the NSE’s SME Market Segment is a pivotal step in our expansion journey,” stated Dr. Sonvir Singh, SKL Managing Director and Co-founder, whose association with the company and the broader Indian diaspora in Kenya is well-established. “It provides us with access to capital markets, enabling us to raise funds and accelerate our future expansion plans, while also presenting opportunities for investors seeking to participate in Kenya’s dynamic packaging sector.”

SKL’s Journey: From Inception to Public Listing

Founded by the visionary duo of Dr. Sonvir Singh and Nirmal Chaudhary, Shri Krishana Overseas (SKL) has steadily carved out a significant niche in Kenya’s burgeoning packaging sector. The company specializes in a diverse range of products crucial for various industries, including corrugated boxes, tray packaging, labels, tapes, and custom containers. Beyond packaging, SKL also maintains a footwear division, showcasing a diversified business model.

SKL’s financial trajectory leading up to this listing demonstrates remarkable growth. Over the four-year period ending December 31, 2024, the company’s revenue surged from KSh 130.2 million in 2021 to KSh 309.9 million in 2024, representing a substantial 138% increase. However, the year-on-year revenue growth in 2024 experienced a sharp slowdown to just +1.2%, a clear indicator that the company’s pre-expansion production capacity had reached its plateau. This bottleneck served as a primary catalyst for the strategic decision to seek public funding through the NSE, enabling the much-needed capital injection to finance their ambitious expansion plans.

The choice of a “listing by introduction” for SKL’s debut means that the company’s existing shares are listed on the exchange without a new public offering to raise capital immediately. This method is often chosen by companies that already have a broad shareholder base or do not require immediate significant capital, but seek the benefits of public listing such as enhanced corporate governance, increased liquidity for existing shareholders, and improved public profile. For SKL, this approach is expected to significantly enhance its corporate governance framework and build greater trust among stakeholders, paving the way for future capital-raising initiatives.

The Nairobi Securities Exchange: A Platform for Growth

The Nairobi Securities Exchange (NSE) plays a critical role in Kenya’s economic development, serving as a vital platform for companies to raise capital and for investors to participate in the country’s growth story. Recognizing the immense potential of Small and Medium-sized Enterprises (SMEs) as drivers of job creation and economic prosperity, the NSE established the Growth Enterprise Market Segment (GEMS) in 2013. The primary objective of GEMS is to provide a more accessible and flexible listing environment for SMEs, enabling them to tap into long-term capital that might otherwise be difficult to secure from traditional banking channels.

The GEMS segment offers tailored listing requirements that acknowledge the growth phase of SMEs, making it a more viable option compared to the main board. Key benefits for companies listing on GEMS include:

• Access to Capital: It provides a mechanism for companies to raise substantial capital for expansion, innovation, and working capital needs.
• Enhanced Profile and Visibility: Listing on a public exchange significantly boosts a company’s credibility and public profile, which can attract further investment, partnerships, and customer trust.
• Improved Corporate Governance: The regulatory oversight and disclosure requirements associated with listing encourage better corporate governance practices, leading to greater transparency and accountability.
• Increased Liquidity: For existing shareholders, listing provides a liquid market for their shares, allowing for easier buying and selling.
• Operational Efficiency: The discipline required for public reporting can often lead to improved internal processes and operational efficiency.

Frank Mwiti, the Chief Executive Officer of the Nairobi Securities Exchange, expressed his enthusiasm for SKL’s listing, stating, “We are delighted with the listing of SKL Limited on the NSE. This listing is in line with our strategy of providing a platform to the SME for access to capital and other resources for growth.” Mwiti, a seasoned business leader with over two decades of international experience in strategy, governance, and corporate finance, has been a strong advocate for leveraging capital markets to support economic development in East Africa. His vision for the NSE aligns perfectly with initiatives like the GEMS segment, which aims to unlock the potential of Kenya’s vibrant SME sector.

Historically, African securities exchanges, including the NSE, have been working to reduce the cost and complexity for SMEs to access capital markets. This involves finding a balance where investors receive sufficient information to make informed decisions, while SMEs can still list cost-effectively. The GEMS segment, with its more relaxed requirements compared to the main trading boards, is a direct response to this need, aiming to foster a conducive environment for SME growth and investment.

Kenya’s Economic Backbone: The Manufacturing and Packaging Sectors

Kenya’s economy has demonstrated resilience, with its Gross Domestic Product (GDP) recording a 4.9% growth in the first quarter of 2025, matching the growth seen in Q1 2024. This growth is supported by various sectors, with agriculture remaining the largest contributor, alongside positive expansions in mining, transport, and finance. The overall economic outlook for Kenya in 2025 remains positive, with projections from the Mastercard Economics Institute forecasting a 4.7% GDP growth, outpacing the global average. This stability is underpinned by robust remittance inflows, active female workforce participation, and ongoing digital transformation.

Within this dynamic economic environment, the manufacturing sector is a cornerstone, despite facing its own set of challenges. As of August 2024, manufacturing contributed approximately 7.6% to Kenya’s GDP, a figure that, while expanding in absolute terms, has seen its share of GDP decline relative to faster-growing sectors like finance and telecommunications. Nevertheless, the sector is a significant employer, directly supporting around 363,000 jobs, making it the second-largest employment sector after the public sector. It also contributes a substantial 18% of the country’s tax revenue.

However, Kenyan manufacturers contend with several hurdles:

• High Operational Costs: Energy costs, in particular, are significantly higher in Kenya compared to regional competitors like Tanzania, impacting global competitiveness.
• Regulatory Burden: Compliance costs and complex regulations add to the operational expenses.
• Competition and Counterfeiting: Manufacturers face stiff competition from cheaper foreign imports and the pervasive issue of counterfeiting, which leads to substantial annual losses.
• Reduced Consumer Purchasing Power: High living costs and inflation can dampen consumer demand for manufactured goods.

Despite these challenges, opportunities abound, particularly in leveraging Kenya’s access to global markets and focusing on value-added processing, especially in agro-processing. The Kenya Association of Manufacturers (KAM) advocates for a robust industrial policy to boost manufacturing’s GDP contribution to 20% by 2030, highlighting its critical role in job creation and economic stability.

The packaging industry, where SKL operates, is a direct beneficiary of the growth in manufacturing, food and beverage, and consumer goods sectors. The Kenyan packaging market was valued at approximately US$ 585 million by the end of 2021. More specifically, the flexible packaging market alone is projected to reach USD 2.19 billion in 2025, growing at a CAGR of 2.38%. This growth is primarily driven by:

• Population Growth and Urbanization: A rapidly expanding population and increasing urbanization lead to higher demand for packaged goods.
• Rising Disposable Incomes: A growing middle class with increased purchasing power fuels demand for premium and conveniently packaged products.
• Flourishing Food Service and Retail Sectors: The expansion of these sectors directly translates to higher demand for various packaging solutions.
• E-commerce Boom: The significant development of e-commerce in Kenya, particularly among small and medium businesses, drives demand for protective and easy-to-handle packaging for online deliveries.
• Evolving Consumer Tastes: A preference for ready-to-eat foods and packaged beverages, along with a demand for convenient features like re-closable pouches, further propels market expansion.
• Sustainability Trends: There’s a growing adoption of eco-friendly materials like paper and bioplastics, and integration of advanced printing technologies for product differentiation and smart packaging solutions to enhance traceability.

While the industry heavily relies on imports for both finished products and raw materials, there’s a notable uptick in local production, bolstered by investments from Asian and European nations. This context positions SKL’s expansion as a strategic response to both existing market demand and future growth opportunities.

SKL’s Ambitious Leap: The Kajiado Plant

To meet the surging demand within Kenya’s packaging industry and overcome its current capacity limitations, SKL is finalizing the construction of a state-of-the-art plant in Kajiado County. This ambitious project is set to increase SKL’s production capacity tenfold, from an existing 2,400 tonnes to an impressive 24,000 tonnes annually.

The choice of Kajiado County for this significant investment is strategic. Kajiado, bordering the capital Nairobi, is increasingly becoming a hub for industrial development in Kenya. The Kajiado County Investment Authority (KCIA) was established to spearhead investment promotion and facilitation, aiming to make the county a top investment destination. Its focus areas include sustainable infrastructure and employment creation, particularly among youth, aligning well with SKL’s expansion plans. The county’s proximity to Nairobi offers logistical advantages, access to a large consumer market, and a growing labor pool.

This tenfold increase in production capacity is transformative for SKL. It will enable the company to:

• Meet Surging Demand: Directly address the growing needs of Kenya’s food, beverage, and other manufacturing sectors for high-quality packaging.
• Enhance Competitiveness: Achieve economies of scale, potentially leading to lower production costs and more competitive pricing in the market.
• Expand Market Share: Capture a larger portion of the rapidly expanding packaging market, potentially reducing Kenya’s reliance on imported packaging materials.
• Drive Innovation: The “state-of-the-art” nature of the plant suggests incorporation of modern technologies, which can lead to more efficient production processes and innovative packaging solutions.
• Create Jobs: The commissioning and operation of such a large plant will undoubtedly lead to significant job creation in Kajiado County, supporting local livelihoods and contributing to the government’s employment creation agenda.

The previous slowdown in SKL’s year-on-year revenue growth to a mere +1.2% in 2024 strongly suggested that the company had hit its pre-expansion capacity limits. The Kajiado plant, therefore, is not just an expansion but a critical strategic imperative to unlock future growth and capitalize on market opportunities.

Beyond the Balance Sheet: Corporate Governance and Investor Trust

While access to capital is a primary driver for listing, SKL’s debut on the NSE is also expected to significantly enhance its corporate governance and stakeholder trust. Public listings inherently bring increased scrutiny and regulatory requirements, forcing companies to adopt higher standards of transparency, accountability, and financial reporting.

For SKL, this means:

• Improved Transparency: Regular financial disclosures and adherence to listing rules provide greater visibility into the company’s operations and financial health.
• Stronger Accountability: The presence of independent directors and oversight by regulatory bodies like the Capital Markets Authority (CMA) ensures greater accountability to shareholders.
• Enhanced Credibility: Being a publicly listed company often confers a higher level of credibility and trust among customers, suppliers, and potential business partners, both domestically and internationally.
• Attracting Institutional Investors: Improved governance makes the company more attractive to institutional investors, who typically have strict criteria regarding transparency and ethical practices.

This commitment to robust corporate governance is not just beneficial for SKL; it contributes to the overall integrity and attractiveness of the NSE as an investment destination. A well-regulated and transparent market fosters investor confidence, which is crucial for mobilizing both local and foreign capital for economic development.

Capital Markets: Catalysts for National Development

The listing of SKL, and the broader activity on the NSE, highlights the indispensable role of capital markets in driving national development. Stock exchanges provide a crucial avenue for companies to raise long-term, patient capital that is often unavailable from traditional bank lending, which typically favors shorter-term debt. This long-term capital is essential for funding large-scale projects, technological upgrades, and ambitious expansion plans that drive industrialization and job creation.

Moreover, capital markets democratize investment, allowing individual and institutional investors to participate in the growth of successful companies. This fosters a culture of savings and investment, channeling domestic resources into productive sectors of the economy. By providing liquidity, price discovery, and a regulated environment, stock exchanges facilitate efficient allocation of capital, supporting economic diversification and resilience.

A Broader Narrative: Infrastructure and National Ambition

SKL’s listing on July 24, 2025, comes just one day after another significant event on the Nairobi Securities Exchange: the issuance of a Sh44.7 billion (approximately $250 million USD) Infrastructure Asset-Backed Security (IABS) by LINZI FinCo Trust. This parallel development underscores the diverse and innovative ways in which Kenya’s capital markets are being utilized to fund national development priorities.

The LINZI FinCo Trust IABS is specifically aimed at supporting the construction of the ambitious Talanta Sports City, a state-of-the-art 60,000-seater stadium. This project is critical for Kenya’s preparedness to co-host the 2027 Africa Cup of Nations (AFCON) alongside Uganda and Tanzania. The IABS mechanism allows private capital to be channeled directly into public infrastructure projects, diversifying funding sources beyond traditional government budgets and external loans. This demonstrates a sophisticated approach to financing large-scale national endeavors, leveraging the efficiency and depth of the capital markets.

The simultaneous occurrence of SKL’s listing and the Talanta Sports City IABS issuance paints a compelling picture of a dynamic and evolving financial ecosystem in Kenya. It showcases a market capable of supporting both private sector expansion in critical industries like manufacturing and public sector infrastructure development, all contributing to the nation’s broader economic and social objectives.

Conclusion: A Positive Outlook for Kenya’s Industrial Future

The debut of Shri Krishana Overseas (SKL) on the Nairobi Securities Exchange is more than just a corporate milestone; it is a powerful symbol of confidence in Kenya’s economic future and the growing maturity of its capital markets. By providing a platform for companies like SKL to access growth capital, the NSE is directly contributing to the expansion of the manufacturing sector, job creation, and the overall economic prosperity of the nation.

SKL’s strategic investment in its Kajiado plant, poised to dramatically increase its production capacity, exemplifies the kind of forward-looking industrial development that will propel Kenya’s economy. Coupled with the innovative financing mechanisms seen in projects like the Talanta Sports City, these developments highlight a vibrant and adaptable financial landscape. As Kenya continues to navigate global economic shifts, the ability of its domestic capital markets to support both private enterprise and national infrastructure will be paramount to achieving sustained, inclusive growth and realizing its Vision 2030 aspirations. The success of SKL on the NSE will undoubtedly serve as an inspiration for other SMEs, encouraging them to explore public markets as a viable pathway to unlock their full potential and contribute to Kenya’s promising industrial future.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

25th July, 2025