MTR Foods owner Orkla India's IPO to open next week; GMP inching higher. 10 things to know

Core Insights - Orkla India is launching a Rs 1,667 crore IPO, which is entirely an offer for sale of 2.28 crore equity shares, with proceeds going to selling shareholders [1][11] - The price band is set at Rs 695–730 per share, with a minimum investment of Rs 14,600 for retail investors [2][11] - The company has a strong brand portfolio including MTR Foods, Eastern Condiments, and Rasoi Magic, positioning it well in the Indian packaged foods market [3][11] Company Operations - Orkla India operates nine manufacturing units in India and utilizes contract facilities in the UAE, Thailand, and Malaysia, selling over 2.3 million units daily across 28 states and 6 union territories, with exports to 42 countries [5][11] - The company is a market leader in southern India and is expanding its national presence, supported by a distribution network of 834 distributors and 1,888 sub-distributors [6][11] Financial Performance - For FY25, Orkla India reported revenue of Rs 2,455 crore, a 3% year-over-year increase, and a profit after tax of Rs 256 crore, up 13% year-over-year, with an EBITDA of Rs 396 crore and healthy margins of 16.6% [7][11] - The company is nearly debt-free with minimal borrowings of Rs 2 crore, a return on capital employed (ROCE) of 32.7%, and a return on net worth (RoNW) of 13.8% [8][11] Valuation and Market Outlook - At the upper end of the price band, the IPO values Orkla India at a P/E of 31.7x post-issue and a market capitalization of approximately Rs 10,000 crore, comparable to FMCG peers like Marico and Tata Consumer, but at a slight discount to premium brands like Nestle India and Hindustan Unilever [9][11] - The grey market premium (GMP) of Rs 55–60 indicates a potential 8% listing gain, with shares expected to debut around Rs 785–790 if market sentiment remains stable [10][11] - Analysts foresee long-term growth opportunities in packaged food consumption in India, driven by urbanization and convenience-led lifestyles, with Orkla's focus on value-added regional brands and category innovation expected to sustain growth [10][11]