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Mumbai: Orkla India Limited, the Indian subsidiary of the formidable Norwegian industrial investment conglomerate Orkla ASA, is poised for a significant market debut. As the parent company of beloved Indian food brands like MTR Foods, Eastern Condiments, and Rasoi Magic, Orkla India is targeting a substantial initial public offering (IPO) with a valuation exceeding $1 billion. This move signals yet another global multinational corporation’s (MNC) decision to unlock considerable value within India’s buoyant domestic stock market.
The proposed IPO is expected to launch as early as the end of October or in November, contingent upon favorable market conditions. Industry sources indicate that the company has already concluded its investor roadshows. Orkla India, formerly known as MTR Food Private Ltd., is reportedly aiming for an IPO valuation in the range of $1.10 billion (approximately ₹9,800 crore) to $1.18 billion (approximately ₹10,500 crore). This ambitious valuation underscores the strong performance and growth potential the market sees in India’s vast packaged food sector.
Deal Structure and Dual Track Strategy
The structure of Orkla India’s IPO is a pure Offer for Sale (OFS). This means the company itself will not receive any of the proceeds; instead, the entire amount raised will go to the selling shareholders. The IPO will involve the sale of 2.28 crore equity shares by the promoter, Orkla Asia Pacific Pte, along with shareholders Navas Meeran and Feroz Meeran. The combined stake of the promoters—Orkla Asia Pacific Pte Ltd and Orkla ASA—currently sits at 90%, with Navas Meeran and Feroz Meeran each holding a 5% stake. The company received the necessary approval from the Securities and Exchange Board of India (SEBI) on September 15th, having filed its draft red herring prospectus (DRHP) in July. The updated draft red herring prospectus (UDRHP) is anticipated to be filed shortly, paving the way for the issue launch.
Notably, the IPO plans have unfolded against the backdrop of earlier speculation regarding a potential acquisition. In February, reports circulated that Indian conglomerate ITC had held discussions to acquire Orkla India for $1.4 billion, a move that would have pivoted the company away from a listing. While an Orkla spokesperson declined to comment on “unfounded market rumors or speculation,” this situation highlights the company’s employment of a dual track process. This is a common strategic approach where a firm simultaneously pursues both an IPO and a private Mergers and Acquisitions (M&A) auction, ultimately choosing the option that best aligns with its needs, valuation expectations, and prevailing market conditions.
Orkla India’s Market Position and Future Focus
Orkla India operates as a diversified food company with a multi-category product portfolio. This includes essential spices and masalas, as well as convenient ready-to-eat sweets, and various breakfast mixes. This positioning places it right in the heart of the burgeoning Indian packaged food market, which, according to a Technopak report, was estimated at a colossal ₹10.18 lakh crore in Fiscal Year 2024, demonstrating a compounded annual growth rate (CAGR) of 10.8% since FY19.
The company’s strategic vision is to significantly strengthen its market positions within the core categories of spices and spice blends. Simultaneously, it plans to introduce innovative products to reinforce its already strong standing in the breakfast, sweets, and ready-to-eat/ready-to-cook meal segments. Looking ahead, the company will adopt a disciplined and focused approach to capital expenditure and M&A, actively seeking value-creating investment opportunities.
The MNC Listing Boom: Following the Hyundai Effect
Orkla India’s decision to list its Indian arm is part of a broader, accelerating trend, often dubbed the “Hyundai Effect.” This refers to the landmark public debut of Hyundai Motor India in October 2024. The domestic arm of the South Korean auto major launched a $3.3-billion issue, the country’s biggest-ever IPO, targeting a massive $19 billion valuation. The success of this listing, with the stock price of Hyundai Motor India Ltd rising by more than 47% in the subsequent six months, has powerfully encouraged other global MNCs to re-evaluate and capitalize on the immense opportunity presented by the Indian market.
The market sentiment is overwhelmingly positive, with the Sensex itself having climbed by nearly 10% in the last six months. This environment has seen a flurry of activity from other MNCs, including the listing of Italian auto parts maker Carraro’s Indian arm in December. Furthermore, the pipeline is full, with reports of Danish brewer Carlsberg evaluating an India IPO, LG Electronics India filing draft papers for a mega public float, and PE major Apollo Global Management initiating the IPO process for Tenneco India, the local arm of US-based auto component maker Tenneco Inc.
The sheer scale and success of these major listings, now including Orkla India’s high-profile entry, underscore the fact that India’s public market has become a crucial and highly valued avenue for global corporations to unlock wealth and fund future growth.
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