Orkla India to Raise $300 Million through Initial Public Offering

Strategic Insights -

Orkla India, the Indian arm of Norway-based Orkla, has initiated talks with bankers to raise $300 million through an initial public offering (IPO), aiming to sell 10-15% of its stake at a valuation of around $2 billion. The company plans to hire bankers in the coming weeks, with the listing expected to take place between June and November 2025. The move comes as part of the company's plans to leverage its combined business capabilities and accelerate growth.

Key Takeaways:

  • Orkla India plans to raise $300 million through an IPO, selling 10-15% of its stake at a valuation of around $2 billion.
  • The company aims to list between June and November 2025, with the hiring of bankers expected in the coming weeks.
  • MTR gets 70% of its revenue from spices and masalas, with sales of Rs 2,400 crore in 2023.
  • Orkla India has three business units: MTR, Eastern, and International Business (IB).
  • The company has initiated a process to consider structural opportunities for its Indian business, including conducting an IPO readiness study.
  • The results of the study are encouraging, prompting the company to proceed with evaluating accessing the capital markets in India.
  • Norway-based Orkla entered India in 2007 by acquiring MTR Foods and bought a majority stake in Kerala-based spice maker Eastern Condiments four years ago.
  • The consumer goods maker gets three-fourths of its sales from southern states, where it is the market leader with MTR and Eastern Condiments dominating Kerala.
  • The spices market in the country is about Rs 90,000 crore, with only a third of it being branded.
  • Domestic players including MTR, DS Foods, Ramdev Food Products, and Eastern Condiments retain an upper hand in select markets in the segement of masala, herbs, and spices.

Statistics:

  • Orkla India plans to raise $300 million through an IPO.
  • The company aims to sell 10-15% of its stake at a valuation of around $2 billion.
  • MTR gets 70% of its revenue from spices and masalas, with sales of Rs 2,400 crore in 2023.
  • The company has three business units: MTR, Eastern, and International Business (IB).
  • Norway-based Orkla entered India in 2007 by acquiring MTR Foods.
  • Orkla India bought a majority stake in Kerala-based spice maker Eastern Condiments four years ago.
  • The consumer goods maker gets three-fourths of its sales from southern states.
  • The spices market in the country is about Rs 90,000 crore.

Sources:

  • ET (Economic Times)
  • Nils Selte, CEO of Orkla, told investors in July that the results of the IPO readiness study are encouraging, and the company will proceed with evaluating accessing the capital markets in India.
  • Abneesh Roy, executive director of Nuvama Institutional Equities, said that the food and spice space is attractive and unorganised, with most listed companies having either acquired or started something on their own in the segment.