The Indian packaged food industry has seen a major shift in consumer preferences toward ready-to-cook (RTC) and convenience food products over the last decade. Orkla India Limited, known for its iconic brands such as MTR Foods, Eastern, and Rasoi Magic, is now coming out with its Initial Public Offering (IPO). This IPO is entirely an Offer for Sale (OFS), where existing shareholders plan to dilute part of their stake. With strong consumer recall, wide product categories and a deep distribution network, many investors are keen to evaluate whether the Orkla India IPO presents a good investment opportunity or not. In this detailed IPO review, we will go through the company’s business model, financial performance, competitive strengths, risks, valuation and finally answer the key question – Should you invest in Orkla India IPO or avoid it?
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About Orkla India Ltd.
Orkla India Limited, previously known as MTR Foods, is a diversified Indian food company established in 1996. It offers a wide portfolio of breakfast mixes, spices, instant mixes, ready-to-eat meals, snacks, beverages and desserts. The company operates under three strong brands:
- MTR Foods – Instant mixes, breakfast mixes, masalas, snacks and beverages.
- Eastern Condiments – Spices and convenience foods.
- Rasoi Magic – Spice mixes and ready-to-cook blends.
The company has a significant market presence across southern India especially in Karnataka, Kerala, Andhra Pradesh and Telangana. It also exports to 42+ countries, including the Middle East, USA and Canada.
Manufacturing and Distribution
- 9 manufacturing facilities in India
- Contract manufacturing in UAE, Thailand and Malaysia
- Distribution network of 834 distributors and 1,888 sub-distributors across 28 states and 6 union territories
Orkla India sells over 2.3 million packs every day across 400+ SKUs.
Competitive Strengths
- Strong Heritage Brands with High Consumer Trust – MTR and Eastern are established brands with decades of presence, leading to deep brand loyalty.
- Multi-Category Product Portfolio – Presence across breakfast, snacks, staples and beverages reduces dependency on any single product category.
- Innovation and R&D Capabilities – The company constantly launches new SKUs and flavor innovations tailored to regional tastes.
- Wide Distribution and Retail Penetration – Presence across urban and rural retail networks helps deeper market penetration.
- Strong Supply Chain and Manufacturing Footprint – Capacity of 182,270 TPA ensures efficient production and fast turnaround.
Orkla India IPO Issue Details
| Particulars | Details |
|---|---|
| IPO Opens | October 29, 2025 |
| IPO Closes | October 31, 2025 |
| Listing Date | November 6, 2025 (Tentative) |
| IPO Type | Book Built Issue (OFS) |
| Price Band | ₹695 – ₹730 per share |
| Lot Size | 20 Shares |
| Total Issue Size | 2.28 crore shares (₹1,667.54 Cr) |
| Listing | BSE & NSE |
| Registrar | KFin Technologies Ltd |
| Employee Discount | ₹ 69 per share |
Lot Size and Investment
| Investor Type | Shares | Amount (Upper Band) |
|---|---|---|
| Retail Minimum | 20 | ₹14,600 |
| Retail Maximum | 260 | ₹1,89,800 |
| Small HNI | 280 | ₹2,04,400 |
| Big HNI | 1,380 | ₹10,07,400 |
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Financial Performance
| Particulars | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Total Income (₹ Cr) | 2,201.44 | 2,387.99 | 2,455.24 |
| EBITDA (₹ Cr) | 312.44 | 343.61 | 396.44 |
| PAT (₹ Cr) | 339.13 | 226.33 | 255.69 |
| ROCE | – | – | 32.7% |
| PAT Margin | – | – | 10.7% |
Revenue growth has been moderate, but margins remain strong. PAT saw a dip in FY24 due to higher raw material costs but recovered in FY25.
Objects of the Issue
Since this IPO is 100% Offer for Sale, the company will not receive any funds. Proceeds go to selling shareholders.
Valuation – P/E Ratio vs Peers
| Company | P/E Ratio |
|---|---|
| Orkla India (Post Issue) | 31.7x |
| Nestlé India | 85x (Highest) |
| Tata Consumer | 60x |
| ITC Foods (Blended ITC) | 29x (Comparable Low) |
| Industry Average | 45-50x |
Valuation Analysis: IPO Valuation appears reasonable compared to peers, especially considering strong brand value and stable margins.
Reasons to Invest
1. Strong Brand Legacy and Consumer Recall
MTR and Eastern are household names with decades of trust. This allows premium pricing and long-term customer retention.
2. Well Diversified Product Portfolio
Having products across breakfast, snacks, staples and beverages reduces cyclic risk and dependency on any single segment.
3. Strong Margins and Consistent Cash Flows
Double-digit EBITDA margins and low debt make the company financially resilient.
4. Pan-India and International Presence
Expanding exports to Middle East, US and South East Asia provides long-term growth visibility.
Risk Factors
1. Entire Issue is Offer for Sale
Company does not receive funds; promoters are partially exiting. It may raise concerns about growth visibility.
2. Intense Competition
Faces competition from ITC, HUL, Tata Consumer, Aachi, MDH, Everest etc., impacting pricing power.
3. Raw Material Price Volatility
Spice and grain cost fluctuations can impact margins.
4. Regional Concentration
Strongest presence in South India; expansion to North India remains ongoing.
5. Investors should go through all internal and external risk factors indicated in the Orkla India IPO RHP/Prospectus.
Grey Market Premium (GMP)
As of the latest updates, the Orkla India IPO GMP is around ₹45-55 per share, indicating moderate listing gains potential. (GMP is unofficial and changes rapidly.)
How to Apply for Orkla India IPO
You can apply using:
- UPI via Zerodha, Groww, Upstox, ICICI Direct, Angel One, etc.
- Net Banking ASBA through your bank account.
Choose Cut-off Price while applying under retail.
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Conclusion – Should You Invest?
Orkla India is a strong branded food company with deep consumer loyalty and robust financials. The valuation is fair compared to industry peers, and growth visibility is stable.
However, since the IPO is entirely an OFS, there are no fresh funds for expansion, and competition remains high.
My View / Recommendation:
- FOR LONG-TERM INVESTORS: ✅ Consider Subscribing
- FOR LISTING GAINS ONLY: Moderate chances; depends on market sentiment.
FAQs
1. Is Orkla India a debt-free company?
Yes, the company has very low debt, improving its financial stability.
2. How many brands does Orkla India operate?
Key brands include MTR Foods, Eastern, and Rasoi Magic.
3. Is there any employee discount in the IPO?
Yes, employees get a discount of ₹69 per share.
4. Will I get guaranteed listing gains?
No. Listing gains depend on demand and overall market sentiment.
5. Does the company export products?
Yes, to over 42 countries including UAE, USA and Canada.
Disclaimer
This article is for educational purposes only and should not be considered as investment advice. Investors should consult financial advisors before investing.
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