Orkla India IPO: Check IPO Date, Lot Size, Price & Details

Business Overview:

The company stands as one of India’s leading multi-category food players with a strong heritage in authentic South Indian cuisine, operating through its flagship brands MTR and Eastern. With a rich legacy and deep consumer trust, the company has built a diversified product portfolio catering to every meal occasion - ranging from breakfast to desserts. It was ranked among the top four Indian players in terms of revenue from operations within the spices and convenience food segment in Fiscal 2024.

The company offers approximately 400 SKUs, selling an average of 2.3 million units daily, backed by robust brand equity in its core markets - Karnataka, Kerala, Andhra Pradesh, and Telangana. The acquisition of Eastern Condiments in March 2021 has further consolidated its position in South India and strengthened its product diversity.

The company has also developed a strong international presence, exporting to 45 countries, primarily the GCC region, the US, and Canada, where the Indian diaspora drives significant demand. With an estimated 22% market share in India’s branded spice exports and Eastern maintaining leadership for 24 consecutive years.

A wide distribution network of 834 distributors and 1,888 sub-distributors, supported by 42 modern trade partnerships and six e-commerce and quick commerce channels, enhances its market reach. Its repository of 4,000+ recipes and focus on innovation have helped the company stay aligned with evolving culinary preferences. Overall, the company’s integrated portfolio, deep regional expertise, and brand-led strategy position it well to capitalize on the growing demand for branded packaged food in India and abroad.

IPO Synopsis:

 Objective of the Issue:

• Carry out the Offer for Sale of 16.6% of Equity Shares of the Company.

Strengths:

• Strong Category Leadership and Brand Equity:
  The company commands leading market positions across South India with a deep-rooted understanding of regional tastes. It holds a 31.2% share in Karnataka, 41.8% in Kerala, and 15.2% in Andhra Pradesh and Telangana in the packaged spices segment. Eastern continues to be India’s largest branded spice exporter for 24 consecutive years, reflecting sustained brand strength and consumer trust.

• Extensive Distribution Network and Market Penetration:
  With 834 distributors, 1,888 sub-distributors, and partnerships with 42 modern trade and six e-commerce players, the company ensures strong pan-India and global reach. MTR and Eastern collectively have a retail presence in over 67% of Karnataka and 70% of Kerala outlets, reaching nine out of ten households in their core markets.

• Robust Manufacturing Infrastructure with Smart Integration:
  The company operates nine manufacturing facilities across India with a total installed capacity of 182,270 TPA. Advanced automation, IoT-enabled production systems, and flexible manufacturing lines enhance efficiency, quality, and scalability. This tech-driven approach allows rapid adaptation to changing consumer demand and diverse product categories.

• Experienced Leadership and Strong Global Parentage:
  Led by industry veteran Sanjay Sharma (MD & CEO) and a team of seasoned professionals, the company benefits from strategic oversight and global best practices under its parent, Orkla ASA (Norway). Orkla’s Global Centers of Excellence provide support in innovation, quality, sustainability and marketing, reinforcing operational excellence and governance standards.

Risks:

• High Geographic Concentration:
  Company’s 70% of revenues are derived from South India, while the rest of India and exports contribute 10% and 20% respectively consistent over the past three fiscals. Moreover, Eight of Nine owned and 15 of 18 contract manufacturing units are located in the South. This regional concentration exposes the business to potential disruptions from adverse climatic, political, or economic events specific to this geography.

• Low Capacity Utilisation Levels:
  Despite an installed capacity of 182,270 TPA, overall utilisation has remained modest at 45 - 48% over the last three fiscal years. Certain plants are operating at below 10% capacity due to new facility commissioning, category expansion (notably confectionery) and subdued demand in select markets. Prolonged underutilisation could weigh on margins and return ratios.

• Ongoing Legal and Regulatory Proceedings:
  The company faces 124 pending proceedings alleging non-compliance under the Food Safety and Standards Act (FSS Act), primarily related to pesticide or insecticide residues exceeding permissible limits. Any adverse rulings could harm the company’s brand reputation, financial performance, and consumer trust, underscoring the need for robust quality control and regulatory compliance mechanisms.

Financial Snapshot (Rs. In Crores):

Peer Comparison:

Conclusion:

Orkla India (MTR & Eastern Brands) presents a strong investment case backed by its leadership in South India’s packaged food and spices market, robust brand equity, and deep regional understanding. With around 70% of revenues derived from South India, the company’s dominance in key states such as Karnataka and Kerala underscores its consumer trust, though geographic concentration remains a notable risk. Its extensive distribution reach across 28 states, along with modern, IoT-enabled manufacturing facilities, positions it well to scale nationally and internationally.

Financially, the company has demonstrated steady revenue growth (FY23–FY25 CAGR of 5.6%), coupled with improving EBITDA margins (15.4% in FY23 to 18.6% in FY25), reflecting operational efficiency and premium product positioning. ROCE and ROE at 18% and 10% respectively are as per industry standards for a FMCG company. PAT margins at 10.4% are above industry average (7.3%), highlighting superior profitability despite moderate top-line growth. However, capacity utilisation below 50% indicates potential inefficiency and expansion ahead of demand.

As India’s packaged food market is projected to grow at an 11% CAGR by FY29, Orkla India is well-placed to capitalize on evolving consumer preferences for convenience, hygiene, and authentic regional flavors.

Recommendation: Buy for Listing Gains for Short term and Well Informed Investors can park their funds for Medium to Long term horizon.