Orkla India IPO opens for subscription: Should you bid for ₹1,667.54 crore issue?

Orkla India Ltd., the parent company of packaged foods maker MTR Foods, is gearing up for its Dalal Street debut, with its initial public offering (IPO) opening for subscription today (October 29). The issue will remain open until October 31.

The company is raising ₹1,667.54 crore through an offer for sale (OFS) of 2.28 crore shares. The issue aims to provide an exit opportunity and liquidity to existing shareholders, rather than raise fresh capital for the business.

What analysts say

SBI Securities: Neutral

SBI Securities said the IPO appears fairly valued, given the company's historical growth record. The brokerage maintained a 'Neutral' rating and said it would monitor the company's performance post listing.

The firm mentioned that Orkla India ranks among the top four companies by revenue within the spices and convenience foods category as of FY24. The company offers a wide range of 400 products across multiple categories, primarily catering to local taste preferences.

Angel One: Subscribe

At the upper price band of ₹730, Orkla India is valued at a post-IPO P/E of 31.68x, which appears reasonable considering its diversified portfolio, strong market presence across key FMCG categories, resilient financials, and long-term growth prospects. Angel One has recommended a 'Subscribe' rating on the issue.

Anand Rathi: Subscribe for long term

Anand Rathi said the IPO is fully priced and recommends a 'Subscribe – long term' rating.

Mehta Equities: Subscribe

Rajan Shinde of Mehta Equities said Orkla India offers investors exposure to a market-leading packaged food and spices company backed by iconic brands MTR and Eastern. Together, the two brands command a 31-42% market share in key southern states and an 18.6% pan-India share in the convenience foods segment.

Shinde added that Orkla India is well placed to benefit from the country's fast-growing packaged foods sector, recommending investors to 'Subscribe' to the issue for the long term.

Orkla India IPO GMP

In the grey market, shares of Orkla India are commanding a premium of around 11% as against the issue price of ₹730 per share, indicating decent investor interest ahead of the IPO launch.

However, analysts cautioned that grey market premiums only reflect early sentiment in the unlisted market and can fluctuate sharply.

IPO details

The IPO has a price band of ₹695-₹730 per share. Investors can bid for a minimum of one lot comprising 20 shares (₹14,600 minimum investment at the upper band) and in multiples of 20 shares thereafter.

As the entire issue is an OFS, the company will not receive any proceeds from the offer. The funds will go to existing shareholders — Orkla ASA, Orkla Asia Holdings AS, and Orkla Asia Pacific Pte Ltd. — who are partially offloading their stakes.

At the upper end of the price band, Orkla India is valued at a P/E of 39x based on FY25 diluted earnings per share (EPS).

Company overview

Orkla entered India in 2007 with the acquisition of MTR Foods and later expanded through acquisitions such as Eastern Condiments, a heritage spice brand in Kerala, acquired in 2021.

The company has built a strong presence in the branded food segment, with spices contributing about 66% of total revenue and the remainder coming from convenience foods.

In an interaction with CNBC-TV18, the company said its revenue growth of around 5% CAGR over FY23-FY25 reflects the ongoing consumption slowdown and high food inflation. Historically, MTR clocked 13% revenue growth between 2010-2020 and 13.3% between 2022-2024.

For the first quarter of FY26, Orkla India reported volume growth of 8.5%. The company said half of its margin expansion was driven by a fall in raw material costs, while the rest came from value-added products, outsourcing of low-value manufacturing, digitisation, and cost efficiencies.

Despite inheriting seven factories from Eastern Condiments, capacity utilisation remains low at 46%, offering ample scope for expansion.

The management added that the company does not require fresh capital infusion, as it generates ₹300-400 crore in annual cash flow and carries no debt on its balance sheet.

Following the IPO, Orkla India shares are scheduled to list on the NSE and BSE on November 6, 2025.

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