Core Viewpoint - The IPO of Orkla India, which was open from October 29 to October 31, received a robust response, being subscribed 48.7 times overall, driven by strong institutional demand despite being a pure offer for sale (OFS) [1][8]. Subscription Details - The Qualified Institutional Buyers (QIB) portion was subscribed 117.6 times, Non-Institutional Investors (NII) 54.4 times, and retail investors 7 times, indicating broad-based participation [1][8]. Investor Sentiment - Investor enthusiasm was attributed to Orkla's strong brand equity, market leadership in packaged foods and spices, and backing from the Norwegian multinational Orkla ASA [2][8]. - Analysts noted that the higher-than-expected subscription occurred despite muted market sentiment, reflecting strong investor interest and confidence in the company's fundamentals [2][8]. Institutional Participation - Orkla India attracted significant institutional participation in its Rs 499.6 crore anchor book, with subscriptions from top domestic fund houses and major foreign sovereign investors [5][8]. Market Trends - Institutions are betting on the company's consistent financial performance and the expanding packaged food market in India, which benefits from rising disposable incomes and urban consumption trends [6][8]. Financial Performance - For FY25, Orkla India reported revenues of Rs 2,455 crore, a 3% year-on-year increase, and a profit after tax of Rs 256 crore, up 13% [7][9]. - The company has healthy profitability with EBITDA margins of 16.6% and a Return on Capital Employed (ROCE) of 32.7% [7][9]. - At the upper price band, the IPO valued the company at 31.7 times FY25 earnings [7][9]. Future Outlook - Analysts suggest that post-listing performance will depend on the company's ability to sustain double-digit earnings growth and expand its distribution network beyond southern India [7][9].

Core Insights - The Orkla India IPO has garnered significant interest, being subscribed 2.70 times by the end of Day 2, with strong participation from Retail Individual Investors (RIIs) and Non-Institutional Investors (NIIs) [2][6][12] - The grey market premium (GMP) for the IPO is reported at Rs 70, suggesting a potential listing price of around Rs 800, reflecting positive investor sentiment [6][10] - The IPO is a complete Offer for Sale (OFS) by Orkla ASA, with no fresh capital being raised, and the price band set between Rs 695 and Rs 730 per share [7][13] Company Overview - Orkla India, established in 1996, is a leading player in the packaged foods and condiments sector, offering over 400 products, including instant mixes, spices, and ready-to-eat meals [8][17] - The company holds a significant market share in South India, with flagship brands MTR and Eastern commanding a 31–42% market share in key markets and an 18.6% share in India's overall convenience food segment [8][17] - Orkla India operates nine manufacturing facilities across India, with a total production capacity of 182,000 tonnes per annum, supported by a robust distribution network [9][17] Financial Performance - In FY25, Orkla India reported a total income of Rs 2,455 crore and a net profit of Rs 256 crore, reflecting a 13% year-on-year growth [10][17] - The company achieved an EBITDA margin of 16.6% and a return on capital employed (ROCE) of 32.7%, indicating strong profitability and operational efficiency [10][17] Analyst Perspectives - Analysts view the Orkla India IPO as an opportunity to invest in a market-leading company with a diverse product portfolio and strong export performance [12][15] - The valuation at the upper end of the price band of Rs 730 translates to a market capitalization of approximately Rs 10,000 crore, with a P/E ratio of around 31.7x based on FY26 annualized earnings [13][16] - Recommendations from analysts suggest a "Subscribe for Long-Term" rating, highlighting the company's strong distribution network and backing from its global parent as key positives for investors [14][16]

Core Insights - The Orkla India IPO has garnered significant interest, with 79% overall subscription on Day 1, particularly strong among Retail Individual Investors (RIIs) who subscribed to 90% of their reserved shares [1][14] - The grey market premium (GMP) for the IPO is Rs 68, suggesting a potential listing price of around Rs 798, indicating a 9.3% expected gain for investors at the issue price [4][14] - The IPO is a complete Offer for Sale (OFS) by Orkla ASA, with no new funds being raised, and is priced between Rs 695-730 per share [5][12] Company Overview - Orkla India, established in 1996, is a prominent player in the packaged foods and condiments sector, offering over 400 products including instant mixes, spices, and ready-to-eat meals [7][15] - The company holds a significant market share, with flagship brands MTR and Eastern capturing 31-42% in key South Indian states and an 18.6% share in India's overall convenience food segment [7][15] - Orkla India exports to over 40 countries and operates nine manufacturing facilities in India with a total production capacity of 182,000 tonnes per annum [8][15] Financial Performance - In FY25, Orkla India reported total income of Rs 2,455 crore and a net profit of Rs 256 crore, reflecting a 13% year-on-year growth [9][15] - The company maintains a strong EBITDA margin of 16.6% and a return on capital employed (ROCE) of 32.7%, indicating robust financial health [9][15] Analyst Insights - Analysts view the IPO as an opportunity to invest in a market-leading company with strong brand recognition and a diverse product portfolio [10][11] - The valuation at the upper price band of Rs 730 results in a market capitalization of approximately Rs 10,000 crore, equating to a P/E ratio of around 31.7 times FY26 annualized earnings, which is considered justified by its market position [12][14] - The growth strategy of Orkla India focuses on innovation, category diversification, and premiumisation, reinforcing its leadership in the packaged food segment [13][14]

Core Viewpoint - Orkla India has successfully raised approximately Rs 500 crore from anchor investors ahead of its initial public offering (IPO), which is set to open for subscription on October 29, 2025 [1][5]. Group 1: IPO Details - The IPO is valued at Rs 1,667 crore and will be available for public subscription from October 29 to October 31, 2025, with a price band set between Rs 695 and Rs 730 per share [5]. - Orkla India is conducting a complete offer for sale (OFS) of 2.28 crore equity shares by promoters and other shareholders, with no fresh issue component [7][8]. - The company will not receive any proceeds from the IPO, as the funds will go entirely to the selling shareholders [9]. Group 2: Investor Participation - A diverse group of prominent domestic and global institutional investors participated in the anchor allotment, including Nippon India Mutual Fund, Aditya Birla Sun Life Mutual Fund, and Government Pension Fund Global [2]. - A total of 6,843,900 equity shares were allotted to anchor investors at a price of Rs 730 per share, raising Rs 499.6 crore [4]. Group 3: Company Background - Orkla India, formerly known as MTR Foods, is a multi-category Indian food company that produces a variety of products, including spices, ready-to-eat meals, and breakfast mixes under well-known brands such as MTR and Eastern [9]. - The company is primarily owned by Orkla Asia Pacific Pte. Ltd and Orkla ASA, holding a combined 90% stake, while the Meeran family holds 5% each [8].

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].

Company Overview - Orkla India Ltd. is set to launch its initial public offering (IPO) on October 29, 2025, aiming to raise approximately ₹1,668 crore through an offer-for-sale [1] - The IPO will be priced between ₹695-730 per share and will close on October 31, 2025 [1] Shareholder Structure - The IPO is entirely an offer-for-sale, with promoter Orkla Asia Pacific Pte. Ltd. selling 2.06 crore shares, and two investor shareholders each selling 11.41 lakh shares [2] - Post-issue, the promoter's holding will decrease from 90% to 75%, with the company's market capitalization projected to reach ₹10,000 crore at the upper price band [2] Market Position and Product Range - Orkla India operates in the packaged food segment, offering around 400 products, including spices, masalas, ready-to-eat meals, beverages, and sweets [3] - The company holds significant market shares in the packaged spices market, with 31% in Karnataka and 42% in Kerala as of FY24 [3] Financial Performance - The company reported revenues of ₹2,395 crore in FY25, with EBITDA margins of 16.6% [4] - Over the past three years, Orkla India achieved sales and EBITDA growth of 5% and 12.9% CAGR, respectively, although adjusted profit declined from ₹338 crore in FY23 to ₹289 crore in FY25 due to tax reversals [4] - The company maintains a virtually debt-free balance sheet and generates annual cash flows of ₹300-400 crore [4] Parent Company and Global Presence - Orkla India is backed by Norwegian parent Orkla ASA, which acquired MTR in 2007 and Eastern in 2021 [5] - The company has expanded its reach to over 45 countries, including GCC nations, the US, and Canada [5] Valuation - SBI Securities has assigned a neutral rating to the IPO, valuing the issue at 34.6 times FY25 earnings [5]