Orkla India IPO Day 3 Highlights: Issue booked 48.73x; GMP signals 12% listing pop — Should apply for MTR's parent firm?

As of the final day of bidding, Orkla India IPO garnered bids for 77,96,28,300 shares, as against 1,59,99,104 shares on offer, translating into 48.73 times bids.

The qualified institutional buyers' (QIB) quota was booked the most at 117.63 times. The non-institutional investor (NII) portion received 54.42 times bids and the retail part closed with 7.05 times subscription. Meanwhile, the employee segment garnered 15.13 times bids.

Orkla India IPO GMP jumped to ₹86 today. At the prevailing GMP and issue price, Orkla India IPO shares could list at ₹816 apiece on the NSE, a premium of 11.78%.

As of June 30, 2025, the company operated nine manufacturing units in India with a total installed capacity of 182,270 TPA. It has continually upgraded its manufacturing capabilities over the years to enhance efficiency, productivity, quality, and safety. The company’s key manufacturing facilities in Bommasandra, Bengaluru, are largely automated—from material receipt and conveying to supervisory control and data acquisition (SCADA)-enabled processing and primary and secondary packaging. The company has also implemented Internet of Things (IoT)-enabled manufacturing at its key facilities in Bommasandra, Bengaluru, integrating IoT sensors with critical machinery to enable real-time tracking of production data.

The company has a presence on leading e-commerce and quick-commerce platforms, ensuring its products are easily accessible to consumers through these channels. Sales through e-commerce and quick-commerce platforms increased by 100.4% between Fiscal 2023 and Fiscal 2025.

Advertising and sales promotion are integral to building and sustaining the brand image of the company’s key brands, MTR and Eastern.

In the three months ended June 30, 2025 and June 30, 2024, and in Fiscals 2025, 2024, and 2023, the company’s advertising and sales promotion expenses amounted to ₹298.5 million, ₹289.9 million, ₹1,424.5 million, ₹1,338.2 million, and ₹1,157.5 million, respectively, representing 5.0%, 5.1%, 5.9%, 5.7%, and 5.3% of total revenue from operations, respectively.

The increase in advertising and sales promotion expenses underscores the company’s focus on brand development and market presence.

• The company’s operations are subject to volatility in the pricing of raw materials and packaging materials. Inability to procure these materials at competitive prices may adversely affect its business, financial condition, cash flows, and results of operations.
• Improper processing or storage of products or raw materials, spoilage or damage to such products or materials, or any real or perceived contamination could subject the company to regulatory action, damage its reputation, and negatively impact its business, financial condition, cash flows, and results of operations.
• Any slowdown or interruption in the company’s manufacturing operations, or under-utilisation of its existing or future manufacturing facilities, may adversely affect its business and financial performance.
• The company is dependent on its suppliers, with its top ten suppliers contributing 37.9% of raw material purchases in the three months ended June 30, 2025, and 33.7% in Fiscal 2025. Loss of suppliers or interruptions in timely delivery of supplies could have a negative impact on its business, financial condition, cash flows, and results of operations.
• The company is party to certain statutory and regulatory actions under the Food Safety and Standards Act, 2006, and any adverse outcome in such matters may negatively affect its business and operations.

Key strengths of MTR and Eastern parent Orkla India:

• Category market leader with the ability to build and scale household food brands through an in-depth understanding of local consumer tastes.
• Multi-category Food Company with a focus on product innovation.
• Extensive distribution infrastructure with deep regional network and wide global reach.
• Efficient, large-scale manufacturing with stringent quality control and a robust supply chain.
• Experienced and tenured management team supported by strong global parentage.
• Capital efficient business model with a track record of delivering profitable growth.

Since the IPO is entirely an offer for sale, the only objective of the company is to achieve the benefits of listing the Equity Shares on the Stock Exchanges.

Orkla India Limited is a leading multi-category food company with a strong capability in building and scaling trusted household brands. The Company leverages deep understanding of regional tastes and culinary cultures to offer products suited to local preferences. It has an extensive distribution network across India and a growing global presence, ensuring strong market reach. Orkla India operates modern, large-scale manufacturing facilities with robust quality and supply chain systems. Its strategy is driven by continuous innovation, category expansion, and premiumisation, reinforcing its position as a market leader in India’s packaged food industry.

At the upper price band, the company is valuing at a P/E of 31.5× based on its FY26 annualized earnings and a market cap of ₹1,00,000 million post-issue of equity shares.

We believe that the IPO is fully priced and recommend a “Subscribe–Long Term” rating.

Orkla India IPO was subscribed 5.16x so far on the third day of the bidding process on Friday. The different segments were booked as follows:

QIB: 0.18x

NII: 16.45x

Retail: 3.15x

Employee: 8.37x

International markets also play a key part in the company’s growth strategy, catering to the Indian diaspora globally who seek authentic South Indian flavours.

In the three months ended 30 June 2025, export revenue stood at ₹1,196.9 million (20.4% of total revenue), and for Fiscal 2025, exports were ₹4,861.7 million (20.6% of total revenue). The company exported to 45 countries (including through deemed exports) as of 30 June 2025, with a strong focus on the GCC countries, the US, and Canada.

According to the Technopak Report, the company held approximately a 22.2% market share in the Indian branded spices exports segment in Fiscal 2024, with the Eastern brand having been India’s largest exporter of branded spices for 24 consecutive years.

There are 834 distributors and 1,888 sub-distributors across 28 states and six union territories. Additionally, it has strong coverage in emerging channels, with partnerships in 42 modern trade retail chains and six e-commerce/quick-commerce platforms. In its core states, it has particularly strong outlet reach: of approximately 300,000 retail outlets selling blended spices in Karnataka and about 74,500 in Kerala, the company’s brands reach 67.5% and 70.4% of those outlets respectively, compared with an industry average of 30–40%.

At a current trailing P/E of approximately 38.1× and an FY25E P/E of roughly 31.7×, Orkla India Ltd is trading at a discount relative to its peer group. While PAT dipped in FY24, the decline was driven solely by a nonrecurring tax adjustment and is not expected to repeat. The company enjoys strong brand equity (notably through MTR), a low leverage position, and excellent returns—ROIC of approximately 30.8% and ROE around 10.4%. Given the modest risk profile, we assign it a SUBSCRIBE rating.

The public issue comprises solely of OFS of ₹1,667.5 crore; thus, the company will not receive any proceeds from the public issue. The promoter and promoter group entities are participating in the OFS and offloading 2.06 crore shares, and Individual public shareholders are also participating and offloading 0.23 crore shares.

India’s spices and convenience foods market is witnessing strong growth, driven by evolving consumer preferences, rising incomes, rapidly growing e-commerce/quick-commerce platforms and rapid urbanisation. The Indian spices market has grown at an 11.5% CAGR approximately to ₹1,230 billion in Fiscal 2024 vs Fiscal 2019 and is expected to grow to ₹2,080 billion in Fiscal 2029. The convenience food market in India is valued at ₹79 billion as of Fiscal 2024 and is projected to reach ₹166 billion by Fiscal 2029, growing at a CAGR of 16%. With a shift toward time-saving meal solutions, the sector is witnessing innovation in product offerings, including healthier alternatives, and premiumization.

With a strong heritage, local flavor expertise, and focus on automation, quality, and brand trust, Orkla India Limited, through its flagship brands MTR and Eastern, is strategically positioned to capitalize on the strong growth in India’s spices and convenience foods sectors. The company aims to enhance product range presence in retail outlets and expand its distribution network in existing geographies, as well as extend its presence into new towns and villages, with a particular focus on developing distribution infrastructure in rural areas.

The company will focus on strengthening its footprint in key global markets with significant demand for authentic South Indian flavours. Investors may consider the IPO as a potential long-term investment opportunity.

The initial public offer of Orkla India Ltd, which owns spices and condiments brands MTR and Eastern, got fully subscribed on the second day of bidding on Thursday. The IPO received bids for 4,32,53,940 shares against 1,59,99,104 shares on offer, translating into 2.70 times subscription, according to NSE data.

Among investor categories, non-institutional investors part fetched 7.59 times subscription, while the quota for Retail Individual Investors (RIIs) got subscribed 2.11 times. The category for Qualified Institutional Buyers (QIBs) received 6 per cent subscription.

Orkla India IPO GMP (grey market premium) today is ₹70. This means shares are trading ₹70 above the issue price of ₹730, signalling a premium of 9.59%. Shares of Orkla India are slated to list on the bourses on November 6.