Orkla India initial public offering (IPO) will open for public subscription today. The Rs 1,667-crore issue will remain open for bidding until October 31. The company raised Rs 499.6 crore from 30 institutional investors via anchor book on October 28.
Orkla India, which owns packaged food brands MTR and Eastern, has set a price band of Rs 695-730 per share. At the upper end, the valuation is estimated to be around Rs 10,000 crore.
Brokerage SBI Securities has assigned a ‘Neutral’ rating to the IPO. The brokerage noted that Orkla India is a leading player in the South Indian packaged spices and condiments market, supported by strong brand recall and consumer preference for MTR and Eastern products.
It cited the company’s diversified portfolio, wide distribution network and backing from Norwegian parent Orkla ASA, a major fast-moving consumer goods company with operations in over 100 countries.
Orkla India raises Rs 500 crore via anchor book ahead of Rs 1,668-crore IPO
Among the growth strategies, SBI Securities highlighted increasing household penetration in core markets, expanding its international presence among the Indian diaspora, introducing new products, improving operational efficiencies and considering strategic acquisitions in adjacent categories and new geographies.
The report also flagged risks such as supply chain challenges, operational issues, supplier concentration and potential legal matters.
In the grey market, shares of Orkla India were quoting at a premium of about 12 percent, according to market trackers. Data from Investorgain indicated a grey market premium (GMP) of Rs 88 per share.
Promoters Orkla Asia Pacific Pte. Ltd and Orkla ASA currently hold 90 percent stake in the company, while Navas Meeran and Feroz Meeran own 5 percent each.
Orkla India, formerly known as MTR Foods, manufactures spices, masalas, ready-to-eat products, sweets and breakfast mixes under the MTR, Eastern and Rasoi Magic brands.
The equity shares are expected to be listed on the stock exchanges on November 6. Allotment of shares is likely to be finalised by November 3.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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