Newsletter
It’s not every day that a Norwegian conglomerate lists its Indian food business. But Orkla ASA, the European parent of MTR Foods and Eastern Condiments, is doing just that. Orkla India Ltd, known for iconic heritage brands in Indian kitchens, is heading for an IPO; a pure offer for sale. That means no new capital for the company, but possibly a new public chapter for one of India’s quiet FMCG giants.
IPO snapshot
About the company
Orkla India makes and markets a wide portfolio of packaged food products under three major Indian brands: MTR Foods, Eastern Condiments, and Rasoi Magic. These cover everything from ready-to-eat meals, instant breakfast mixes, spice powders, snacks, beverages, and cooking aids. As of March 2024, the company had over 400 SKUs and sold an average of 2.3 million packs every day.
It operates through 9 manufacturing facilities in India, and also leverages contract manufacturing in the UAE, Thailand, and Malaysia. Its top domestic markets are Karnataka, Kerala, Andhra Pradesh, and Telangana. Internationally, it exports to 42 countries, including the US, Canada, and GCC nations.
Financial performance
Revenue grew modestly by 3% year-on-year, reaching ₹2,455 crore in FY25, while net profit rose 13% to ₹255.7 crore. PAT margin stood at 10.7%, supported by operational efficiencies and zero debt. Net worth, however, declined from ₹2,201 crore in FY24 to ₹1,853 crore in FY25 due to dividend payouts and internal restructuring.
What stands out is the 32.7% return on capital employed (ROCE), suggesting strong internal capital efficiency in a relatively low-growth but profitable food segment.
Backers and buyers
Orkla India is currently 90% owned by Orkla ASA through its subsidiaries: Orkla Asia Holdings AS and Orkla Asia Pacific Pte Ltd. The IPO is a pure offer for sale, meaning existing promoters will dilute part of their holding. No fresh issue is planned, so no new institutional investors are entering via this IPO. The company's heritage brands like MTR and Eastern are widely used by both domestic and NRI households.
The IPO funds will be used for
Since this is an Offer for Sale, the proceeds go directly to the selling shareholders (Orkla group entities). The company will not receive any IPO funds. However, the offer expenses including legal fees, registrar fees, and marketing costs will be borne partly by the company as outlined in the DRHP.
Risk factors
The company is highly dependent on two core brands, which accounted for the majority of revenue. It also has geographic concentration in South India and could face growth limitations unless it expands further north and west. Inflation in raw material prices (spices, grains, packaging) and forex exposure from exports are other factors to watch.
Reasons to consider investing
Orkla India has a strong mix of heritage brands and consistent profitability. Its pan-India distribution with a deep presence in South India gives it a loyal customer base. The company is debt-free, has posted a steady rise in net profits and operating margins, and enjoys a high return on capital. Backed by a global food major, it also benefits from global sourcing, quality control, and governance systems. With exports to 42 countries and 2.3 million packs sold daily, it has meaningful volume visibility and a platform for long-term growth.
Final take
Orkla India is not chasing capital; it’s offering liquidity. For investors, this IPO is a chance to participate in a profitable but traditionally private packaged food business with a household presence in southern India and an expanding global footprint. The business is clean, asset-light, and steady, but whether the IPO valuation leaves enough on the table remains to be seen.
FAQs
What does Orkla India Limited do?
Orkla India is a packaged food company offering products under brands like MTR Foods, Eastern Condiments, and Rasoi Magic, with over 400 SKUs sold across India and 42 export markets.
Is the Orkla India IPO a fresh issue or an offer for sale?
The IPO is entirely an offer for sale of 2.28 crore shares by existing promoter entities. The company will not receive any funds from the issue.
Who are the promoters of Orkla India?
The promoters are Orkla ASA and its subsidiaries — Orkla Asia Holdings AS and Orkla Asia Pacific Pte Ltd, which together held 90% of the company pre-IPO.
What is the revenue and profit of Orkla India in FY25?
Orkla India reported revenue of ₹2,455 crore and profit after tax of ₹256 crore in FY25, marking a 3% and 13% increase year-on-year respectively.
What is Orkla India’s market presence?
It has a strong foothold in South India, particularly in Karnataka, Kerala, Andhra Pradesh, and Telangana, and exports to over 40 countries globally.
What are the key brands under Orkla India?
The company owns well-known Indian brands such as MTR, Eastern, and Rasoi Magic across categories like spices, ready mixes, snacks, and beverages.
What is Orkla India’s ROCE and PAT margin?
For FY25, the company posted a Return on Capital Employed (ROCE) of 32.7% and a PAT margin of 10.7%, indicating strong capital efficiency and profitability.
What are the risks associated with Orkla India?
Key risks include regional revenue concentration, raw material cost inflation, and dependence on a few flagship brands for most of its business.
Will any new shares be issued in the Orkla IPO?
No, the IPO consists entirely of an offer for sale. The total number of shares remains unchanged at 13.69 crore post-issue.
Where will Orkla India shares be listed?
The equity shares of Orkla India Ltd will be listed on both the BSE and NSE after the IPO.
