Can Orkla India’s IPO Add Flavour to Your Portfolio?

Orkla India’s Initial Public Offering (IPO) opens today, offering investors a stake in one of South India’s most iconic food companies. The subsidiary of Norwegian industrial group Orkla ASA is home to heritage brands MTR (est. 1924) and Eastern (est. 1983), boasting a portfolio of 400+ products across spices and convenience foods. The subscription window for the IPO remains open until October 31.

But is this IPO an attractive investment opportunity or should investors tread cautiously? As always, it's crucial to evaluate the growth potential and associated risks before making a decision. For a detailed review, see our comprehensive IPO analysis here.

Orkla India IPO Details 

• Issue Details: Mainstream
• Issue Size: Rs 1,667.54 crore
• Fresh Issue: -
• Offer for Sale: Rs 1,667.54 crore
• Price Band: Rs 695 – Rs 730
• Lot Size: 20 shares
• Listing Date: November 6, 2025

Overview of Orkla India Ltd

• Orkla operates 9 manufacturing facilities across India, with a total installed capacity of 182,270 TPA. It ranks among the top four Indian food companies by FY24 revenue in the spices and convenience foods segment. The company also has a growing international presence, exporting to 45 countries, with overseas markets contributing around 21% of total revenue.
• Orkla’s portfolio spans the entire meal spectrum — from breakfast and snacks to main courses and desserts. With a strong understanding of regional tastes and a commitment to quality, Orkla has built a leading position in South India’s packaged food market.

Orkla India Key Strengths

• Market Leadership: Orkla holds a dominant position in South India’s packaged spices market. In Karnataka, it commands ~31% market share — including ~41% in blended spices and 19% in pure spices. In Kerala, it leads with ~42% share, comprising ~44% in blended and ~40% in pure spices. The company is also the second-largest player in Andhra Pradesh and Telangana with a ~15% share.
• Robust Distribution Network: Orkla has a strong pan-India presence, with 834 distributors and 1,888 sub-distributors operating across 28 states and 6 union territories, supported by partnerships with 42 modern trade outlets and 6 e-commerce platforms. Its flagship brands, MTR and Eastern, enjoy exceptional retail penetration — available in 67.5% of Karnataka’s ~3 lakh blended spice outlets and 70.4% of Kerala’s ~74,500 outlets — far exceeding the industry average of 30–40%.
• Financial Strength: Orkla maintains a solid financial foundation, reflected in its strong Return on Capital Employed (32.7%) and impressive cash conversion ratio (124.8%), highlighting efficient capital utilization and disciplined financial management. With a zero net-debt position as of June 30, 2025, the company retains significant headroom for future investments and strategic acquisitions.
• Rapid E-commerce Expansion: Orkla’s digital sales channels have gained strong traction, with e-commerce and quick commerce revenues rising 100% between FY23 and FY25. These platforms are expected to contribute a double-digit share of total sales by FY27, reflecting the firm’s agility in leveraging new-age distribution formats and evolving consumer behaviour.

Orkla India Risk Factors

• Inconsistent Performance: Orkla’s financial performance has been uneven, with revenue growth moderating to 8% in FY24 and 2% in FY25. Although net profit rebounded by 13% in FY25, this followed a sharp 33 % decline in FY24, indicating volatility in earnings momentum.
• Underutilised Capacity: Orkla’s capacity utilization remained low at approximately 46% in both FY25 and Q1FY26, suggesting significant inefficiencies in asset use. Prolonged underutilization could weigh on margins, profitability and overall operational performance.
• Regulatory Concerns: Orkla is subject to regulatory scrutiny under the Food Safety and Standards Act, 2006, with 124 ongoing proceedings alleging non-compliance before various judicial and regulatory bodies. Any adverse rulings or penalties could materially affect its reputation and business operations.
• Legal Proceedings: Orkla and certain directors and promoters are involved in ongoing legal cases, including criminal proceedings amounting to approximately Rs 160 crore. An unfavorable outcome in these matters could have a material adverse impact on the company’s financials and brand image.

Final Thoughts: Should You Subscribe to Orkla India’s IPO?

• Orkla enjoys a dominant presence in South India’s packaged spices market, anchored by strong brands such as MTR and Eastern. The company’s wide distribution network, debt-free balance sheet, healthy RoCE and growing e-commerce sales highlight its solid operational efficiency and sound financial management.
• At a valuation of ~39x FY25 earnings, the IPO appears reasonably priced—especially when compared to Tata Consumer Products (trading at ~90x), despite Orkla boasting superior profitability margins and return ratios.
• With the packaged foods industry on a strong growth trajectory, Orkla’s financial strength and cash generation capacity position it well for sustained expansion.
• Overall, the IPO presents a balanced investment opportunity. Long-term investors seeking exposure to India’s growing FMCG and packaged food sector may consider subscribing, while those focusing on short-term listing gains should remain cautious.

For a deep dive into other IPOs, explore: IPO Corner on Liquide