IPO Note : Orkla India Ltd by Geojit Financial Services Ltd
Backed by strong parentage, rooted in south Indian heritage...
Orkla India Ltd. (Orkla), established in 1996, is a multi-category Indian food company offering ~400 products across every meal occasion, from breakfast to desserts, under its trusted brands MTR and Eastern. With strong roots in South Indian culinary traditions, the company’s key categories include Spices (blended and pure) and Convenience Foods such as ready to cook, ready to eat, and vermicelli. As of June 2025, Orkla operates nine owned manufacturing facilities across India, with a total installed capacity of 182,270 tonnes per annum (TPA).
* India’s packaged food market, valued at Rs.10,180bn in FY24, has grown at a CAGR of 10.8% since FY19 and is projected to reach Rs.17,120bn by FY29, registering a CAGR of 11.0%. The growth is supported by rising income levels, increasing urbanisation, evolving consumer preferences, and steady yearround demand. (Source: Technopak analysis).
* Orkla ranked among the top four companies by revenue in the spices and convenience food segment, with an average daily sale of 2.3mn units as of June 30, 2025.(Source: Technopak analysis).
* Through its brands MTR and Eastern, Orkla has established a strong foothold in major South Indian markets (~31% in Karnataka & ~42% in Kerala in packaged spices segment) by emphasising authentic local flavours and consistent product quality. The company holds an 18.6% pan-India market share in the ready to eat and ready to cook convenience foods segment.
* Over FY23–FY25, revenue and EBITDA recorded a CAGR of 5% and 13%, respectively, while adj. PAT declined from Rs.338cr in FY23 to Rs.256cr in FY25, mainly due to a tax reversal in FY23.
* Orkla’s revenue growth in FY25 was affected by lower spice prices, particularly chillies, and subdued consumer demand amid food inflation; however, the company improved its EBITDA margin to around 16.6%, supported by softer raw material costs and improved operational efficiency.
* Orkla operates 9 manufacturing units across the country, currently running at ~46% capacity utilization—indicating significant potential to scale production as demand increases.
* At the upper price band of Rs.730, Orkla is available at a P/E of 31.7x (FY26E annualised), which appears fairly priced compared to its peers. Orkla India is poised for long-term growth, backed by a strong balance sheet, steady cash flows, supportive policy tailwinds, focus on regional brands, product innovation, robust distribution network and early signs of demand recovery— especially as GST cuts and rising consumer sentiment boost its core food categories. Hence, we assign a SUBSCRIBE rating for investors with a long-term investment horizon.
Purpose of IPO
The issue is primarily an Offer for Sale (OFS) of up to 22,843,004 equity shares totalling Rs.1,668cr. Offer for sale from promoter comprises sale of 20,560,768 equity shares by Orkla Asia pacific Pte. Ltd. and up to 1,141,118 equity shares each by other selling shareholders namely Mr. Navas Meeran and Mr. Feroz Meeran. The objective of the issue is to achieve the benefits of listing the equity shares on the stock exchanges.
Key Risks
* ~ 70% of sales is concentrated in South India in Q1FY26.
* Orkla India faces 124 legal proceedings over alleged use of impermissible substances, which may impact its operations or finances.
Peer Valuation
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SEBI Registration Number: INH200000345
