🏢 1. Business Overview
- Company Name: Orkla India Limited
- Formerly: Orkla India Pvt. Ltd. and MTR Foods Pvt. Ltd.
- Core Business:
- Manufacturing and marketing branded packaged foods, especially spices, ready-to-eat, instant mixes, and condiments under brands like MTR and Eastern.
- Products include blended & pure spices, masala mixes, breakfast mixes, ready meals, and sweets.
- Geographical Presence:
- India Revenue FY25: ₹18,721.5 million
- Outside India Revenue FY25: ₹4,861.7 million
- Export Markets: Middle East, North America, and parts of Asia via subsidiary Orkla IMEA Trading LLC (UAE).
- Strategic Focus: Expansion through regional acquisitions (Eastern Condiments merger, Rasoi Magic, and BAMS Condiments) and cross-brand integration.
🌏 2. Industry & Market Overview
- Sector: Packaged Food & Spices Industry (India)
- Market Size (South India Packaged Spices FY24):₹120+ billion
- Key Trends:
- Shift from homemade to packaged spice blends for convenience.
- Growth in exports due to diaspora demand and global interest in Indian cuisine.
- Industry Consolidation: Larger players acquiring regional brands (Orkla–Eastern in 2021, ITC–Sunrise, Dabur–Badshah, Wipro–Nirapara).
- Orkla’s Market Share:
- Karnataka: 31.2% (leader)
- Kerala: 41.8% (leader)
- Andhra Pradesh & Telangana: 15.2% (2nd largest).
💰 3. Objects of the Issue
- Offer Type: 100% Offer for Sale (OFS) of up to 22,843,004 equity shares (₹1 FV).
- Selling Shareholders:
- Orkla Asia Pacific Pte. Ltd. – 20.56 million shares
- Navas Meeran – 1.14 million shares
- Feroz Meeran – 1.14 million shares
- Purpose:
- Listing and visibility benefits.
- No fresh issue; company will not receive proceeds, funds go to selling shareholders.
📊 4. Financial Highlights (₹ million)
| Particulars | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | 23,583.2 | 23,223.9 | 21,377.3 |
| EBITDA | ~3,000 (est. 13% margin) | ~2,800 | ~2,500 |
| Net Profit | ₹1,600–1,700 (est. 7% margin) | ₹1,500 | ₹1,300 |
| EPS (₹) | 12.0 (post split) | 11.0 | 9.8 |
| ROE / ROCE | 18–20% | 17% | 15% |
| Cash from Operations | Positive and consistent | ||
| Dividend (FY24) | ₹6,000 million (₹438/share pre-split) |
💧 5. Cash Flow Analysis
- Operating Cash Flow: Positive and aligned with profits.
- Investing Cash Flow: Negative due to acquisitions (Eastern, BAMS).
- Financing Cash Flow: Outflow due to dividend and repayment of intercompany loans.
- No evidence of profit–cash flow mismatch.
⚠️ 6. Key Risk Factors
- Volatile raw material costs (chilli, coriander, turmeric) impacting margins.
- High dependence on South India (over 70% revenue).
- No proceeds to company (entirely OFS).
- Integration risks post multiple acquisitions (Eastern, Rasoi Magic).
- Competition from strong FMCG peers (ITC, Everest, Aachi, Wipro, Dabur).
👥 7. Promoter & Management Analysis
- Promoters:
- Orkla ASA (Norway) – Ultimate Parent
- Orkla Asia Holding AS
- Orkla Asia Pacific Pte. Ltd.
- Key People:
- Atle Vidar Nagel Johansen – Chairperson
- Sanjay Sharma – MD & CEO
- Suniana Calapa – CFO
- Independent Directors: Meena Ganesh, Rashmi Joshi, Shantanu Khosla
- Promoter Holding (Pre-IPO):~85–90%
Post-IPO: Expected ~70% after OFS. - No major legal or regulatory controversies found.
🤝 8. Related Party Transactions
- Transactions with Orkla Group entities and associates like Pot Ful India Pvt. Ltd., Orkla IMEA Trading LLC, Orkla IT AS, and Orkla Procurement AS.
- Nature: cross-charges, IT services, procurement, and shared services.
- All on arm’s length basis, no abnormal or conflict-prone transactions reported.
⚖️ 9. Peer Comparison & Valuation
| Company | FY24 Revenue (₹ Cr) | PAT Margin | P/E | EV/EBITDA |
|---|---|---|---|---|
| Everest Food Products | ~1,200 | 12% | 70x | 45x |
| MDH (Unlisted) | ~2,000 | 10% | – | – |
| Orkla India (MTR + Eastern) | ~2,350 | 7% | TBD | TBD |
| ITC (Foods Division) | Large | 13% | 30x | 22x |
Inference: Pricing will likely be at a discount to Everest (due to lower margins but larger scale).
🚩 10. Red Flags & Governance Checks
- Auditors (S.R. Batliboi & Associates LLP) reported no qualifications.
- Entire IPO is OFS, no capital inflow for business.
- Regional concentration risk in South India.
- Dependence on few key brands (MTR & Eastern).
- No negative cash flow or auditor resignation.
- Not declared as a wilful defaulter; no major litigations.
🧭 Summary Verdict
| Aspect | Assessment |
|---|---|
| Business Strength | Strong regional brands, synergy between MTR & Eastern |
| Financial Health | Profitable, cash-positive, moderate margins |
| Valuation | Expected moderate P/E, likely fair-to-premium pricing |
| Governance | Clean audit, reputed global promoter (Orkla ASA) |
| Risk Level | Moderate – input cost volatility & OFS-only IPO |