Punyalan Agarbattis is the story of Joy Thakkolkaran, a young entrepreuner from Thrissur. His new business venture 'Punyalan Agarbattis' involves manufacturing agarbattis from elephant dung. Fragrance and quality of his incense sticks aside, its mosquito repellant capabilities too have pleased those who tried the samples. However, Joy suddenly has a new set of people and problems as 'Punyalan Agarbattis' comes to a halt.

The story revolves around three unemployed people who get involved in a kidnapping saga due to a case of mistaken identity.

Saleena is happily married to Mathew , a wealthy estate owner. Inexplicably she commits suicide much to the shock of Mathew. He firmly believes that there existed no reason for her to do the act and asks his journalist friend Balu to investigate why. Balu, who was also close to Saleena, tries to piece together clue from her past to figure out the answer.

Unemployed youth Appukuttan (Mohanlal) saves an heiress Chandra (Sukanya) and is mistaken for her husband. His juice vendor friend (Sreenivasan) also enters the fray and pretends to be Chandra's "husband" at her father's factory, while Appukuttan plays the same role in the hospital

While Pranchiyettan, a devotee of St. Francis of Assissi, attains the best of riches, he is unsatisfied with his reputation and sets off to popularise himself as a celebrity in society.