Core Viewpoint - Orkla India is launching a ₹1,667-crore public issue, with shares priced between ₹695 and ₹730, aiming for an implied market capitalization of around ₹10,000 crore, while the Norwegian parent company will retain a 75% stake post-listing [1][2]. Financial Performance - At the upper price band, the stock is valued at approximately 39 times FY25 earnings per share, which is over a 50% discount compared to Tata Consumer Products Ltd, indicating a fair valuation rather than a cheap one [2][13]. - The company reported total revenue of ₹2,358 crore and a blended EBITDA margin of 16.6% in FY25, with a decline in net profit from ₹339 crore in FY23 to ₹256 crore in FY25, reflecting a mid-cycle reset rather than steady growth [7][10]. - Despite a 7% fall in price realization due to commodity deflation, spice volumes grew by 5.5%, indicating a potential strengthening of long-term brand loyalty [9][10]. Operational Strengths - Orkla India benefits from a debt-free balance sheet, efficient operations, and a return on capital employed (RoCE) exceeding 30%, supported by heritage brands and a strong market position in South India [3][11]. - The company holds significant market shares in key regions: approximately 31% in Karnataka, 42% in Kerala, and 15% in Andhra Pradesh-Telangana, with South India contributing 70% of overall sales [8]. Product Portfolio - The core business of spices contributes about two-thirds of FY25 revenue, with estimated EBITDA margins in the high teens to low twenties, while the convenience-foods segment accounts for one-third of revenue, operating at lower-teen margins [6][7]. - The company is expanding its product offerings, including convenience foods and blended spices, and aims to enhance brand presence through regional advertising and modern trade [12]. Growth Prospects - Future growth is expected to rely on deeper market penetration, a wider product portfolio, and improved efficiency, with plans to scale up in international markets such as the GCC, US, and Canada [12]. - If Orkla India can sustain 10-12% annual revenue growth and normalize margins, EPS could compound at approximately 12-13% CAGR over FY25-28, suggesting a reasonable forward valuation [14]. Dividend Policy - In March 2025, Orkla India declared its first-ever dividend of ₹600 crore, with a significant portion going to the Norwegian parent company, indicating a strategy to reset the balance sheet before the IPO [16].