Orkla IPO a market test of FMCG boom

A deeper challenge lies in the company's geography, as southern India made up 70% of FY25 revenue

- Mayur Bhalerao [e-mail]

After two decades of dominating kitchens in southern India, Orkla India-the force behind the MTR and Eastern brands-is now testing investors' appetite for India's packaged-food boom. The ₹1,667-crore initial public offering (IPO), opening Wednesday, is an offer-for-sale (OFS) of 22.8 million shares priced between ₹695 and ₹730 apiece, by the promoter entity Orkla Asia Pacific Pte and other shareholders, Navas Meeran and Feroz Meeran.

A subsidiary of Norway's $11 billion consumer-goods major Orkla ASA, the company sells over 2.3 million packs daily across 400 products, from spices to ready-to-eat meals. Though rooted in south Indian culinary traditions, its reach extends to 45 countries, with exports contributing more than a fifth of revenue.

Despite some margin softening, Orkla India's profitability and operational efficiency remain strong. Its net profit margin declined from 15.6% in FY23 to 10.7% in FY25, yet still outpaces Tata Consumer Products Ltd's 7.3%. Ebitda margins, too, have consistently exceeded Tata Consumer's over the past three years, underscoring pricing power and cost discipline. Tata Consumer is the only listed peer, according to Orkla's filings.