MC EXCLUSIVE MTR Foods parent Orkla India likely to launch around Rs 1,660 crore IPO between Oct 29 and Oct 31

MTR Foods parent Orkla India likely to launch Rs 1,650-crore IPO between Oct 29 and Oct 31

Orkla India Limited, the Indian arm of the Norwegian industrial investment conglomerate and the parent of iconic domestic brands MTR Foods, Eastern Condiments and Rasoi Magic is gearing up to launch its initial public offer (IPO) between October 29 and October 31, multiple industry sources in the know told Moneycontrol.

"The red herring prospectus will be filed shortly and the plan is for the deal to be launched for public subscription between October 29 to 31, with the anchor book slated for October 28," said one of the persons above.

A second person confirmed the same timelines.

According to two other persons, the final post-money valuation of the IPO had settled at around Rs 10,000 crore ($1.13 bn) at the higher end of the price band

One of them said the IPO, a complete offer for sale ( OFS) of 2.28 crore equity shares, will see participation by promoter Orkla Asia Pacific Pte, along with shareholders Navas Meeran and Feroz Meeran, will see a total dilution of around 16.6 per cent stake, implying an issue size of around Rs 1,660 crore.

All the four persons above spoke to Moneycontrol on the condition of anonymity.

Moneycontrol has sent email queries and could not elicit an immediate response from Orkla ASA and Orkla India. This article will be updated as soon as we hear from the firms.

On October 10, Moneycontrol was the first to report that Orkla India was targeting an IPO valuation between $1.10 billion ( Rs 9,800 crore) and $1.18 billion (Rs 10,500 crore), with the deal launch likely by October end or November depending on market conditions.

The proposed listing is yet another sign of a global MNC looking to unlock value in the domestic stock market.

It comes on the back of LG Electronics India, the unit of the South Korean major, becoming the first large IPO in India ( Rs 11,607 crore) to cross the Rs 4 lakh crore-mark in subscription. On October 14, LG Electronics India soared by 48 per cent, the best trading debut by a billion-dollar IPO in India.

Hyundai Motors India and Carraro India are other MNCs that have made their market debut, with issues by the likes of Carlsberg India, Apollo Global-backed Tenneco India and Hillhouse Investment-backed Versuni (formerly Philips Domestic Appliances) in the works.

The Orkla India IPO journey: Deal structure

Orkla India received the Sebi nod for the IPO on September 15 and had filed its draft red herring prospectus (DRHP) earlier in July.

The promoters — Orkla Asia Pacific Pte Ltd and Orkla ASA — collectively hold a 90 per cent stake in the company. Navas Meeran and Feroz Meeran hold 5 per cent stake each.

Since the IPO is entirely an OFS, no proceeds will be received by the company and the entire amount raised will go to the selling shareholders.

As per the draft red herring prospectus, the book-running lead managers to the issue are ICICI Securities, Kotak Mahindra Capital, Citigroup Global Markets India and JP Morgan India and Shardul Amarchand Mangaldas is the legal counsel to the company.

More on Orkla: India entry

Orkla entered India in 2007 by buying MTR Foods and, five years later it acquired Kerala-based spice maker Eastern Condiments. Then in 2023, the firm restructured its Indian operations, consolidating its three business units—MTR, Eastern and international business — into a single entity named Orkla India.

Orkla India is a multi-category food company that offers a range of products including spices, masalas, ready-to-eat sweets, and breakfast mixes.

According to a Technopak report, the Indian packaged food market was estimated at Rs 10.18 lakh crore in FY24, growing at a CAGR of 10.8% from FY19.

The parent Orkla operates in the branded consumer goods, aluminium products and financial investment sectors. The firm has multiple brands and consumer-oriented businesses in Norway, Sweden, Denmark, Finland, Iceland, the Baltics, rest of Europe, and internationally.

Orkla ASA is listed on the Oslo Stock Exchange and had a market cap of $10.6 billion at the end of day's trade on October 22 and the firm's head office is in Oslo, Norway.

The parent outlined the strategy for 2024-2026 for the Indian arm in its last annual report.

"The focus going forward will be to further strengthen Orkla India’s market positions within the core categories of spices and spice blends, while also introducing innovations to strengthen Orkla India’s strong positions in the breakfast, sweets, and ready-to-eat and ready-to-cook meal segments. Orkla India will seek value-creating investment opportunities, with disciplined and focused approach to both capital expenditure and mergers and acquisitions," the report said.

FAQs

How did Orkla originate?

The firm has mining roots by the river Orkla in Norway

What is the connection between Orkla and Carlsberg?

At one time, Orkla held as much as a 40 per cent stake in Carlsberg Breweries and later sold it.