Orkla India IPO: Should you apply?

Summary: Orkla India, a reputed player in the packaged food space, is opening its IPO on October 29, 2025. While it may be among the leading brands in the segment, risks such as geographical concentration and regulatory controls remain. We analyse the company’s past financials, strengths and weaknesses to determine whether its issue is worth subscribing to.

Orkla India, a packaged food provider, will open its IPO (initial public offering) on October 29, 2025 and close on October 31, 2025. The company aims to raise a total of Rs 1,668 crore entirely through an offer for sale (OFS).

Below is a breakdown of the company’s business, financials, strengths, risks and valuation to help you make an informed investing decision.

What the company does

Orkla India, formerly known as MTR Foods Limited, is a leading multi-category food company with a legacy spanning decades and a strong presence in spices and convenience foods. Through its well-known brands, MTR and Eastern, the company brings authentic South Indian flavours to Indian kitchens. Its portfolio of around 400 products includes blended and pure spices, ready-to-cook and ready-to-eat meals.

As of June 2025, Orkla India sold an average of 2.3 million units daily, ranking among the top four players in its segment by revenue.

Track record and valuation

On the financial front, Orkla India appears to be a mixed bag. Between FY23 and FY25, the company’s revenue grew at a modest 5 per cent annually, while profit after tax (PAT) remained in the negative, slipping by slightly over 13 per cent during the same period. However, Orkla India saw a significant decline in its total debt, falling by 24 per cent over the three-year period.

At the upper end of the price band (Rs 730), the stock is expected to be valued at over 38 times its TTM earnings and 3.9 times its book value. In comparison, Orkla India’s only listed peer, Tata Consumer Products, trades at a P/E of over 87 times and a P/B of 5.7 times.

The good

Here are some of the positives of Orkla India.

#1 Among the leading players in the packaged food space

Orkla India has established itself as a category leader in packaged spices across South India, backed by its ability to build strong household food brands. Its flagship labels, MTR and Eastern, dominate the vegetarian and non-vegetarian spice segments respectively, reflecting deep brand equity and regional insight. 

Even dishes with the same name are customised to regional nuances. For example, the recipes for MTR and Eastern’s Sambar Masala differ across states to match distinct flavour preferences.

#2 Widespread distribution network

Orkla India has built a strong distribution network spanning the length and breadth of India, supported by over 800 distributors and 1,800 sub-distributors across 28 states and six union territories. Its brands enjoy exceptional market penetration, with a presence in nearly 70 per cent of retail outlets in Karnataka and Kerala, far above the industry average. 

The company has also expanded rapidly in e-commerce and quick-commerce, with sales doubling between FY23 and FY25. Beyond India, Orkla exports to 45 countries, including the Middle East, US, Canada, Australia and New Zealand.

#3 Consistent track record

Orkla India has delivered consistent revenue growth, fuelled by strong brand loyalty and repeat purchases in its core spices segment. In FY24, it recorded Rs 2,356 crore in revenue, ranking among the top four players in the packaged spices category. The company has also achieved impressive profitability gains, with EBITDA and net profit growing at 20.3 per cent and 39 per cent per annum, respectively, between FY22 and FY24, reflecting effective cost control, operational efficiency and disciplined capital management. 

The bad

Despite its strong financials and market leadership, Orkla India faces certain challenges.

#1 Dependency on a handful of suppliers

Orkla India sources key raw materials such as chilli, coriander, cumin, turmeric and wheat from a network of over 200 suppliers, with its top 10 vendors accounting for about one-third of purchases. While it typically works with multiple suppliers to avoid dependency, certain key ingredients like tamarind concentrate and asafoetida are sourced from single vendors, posing concentration risks. The absence of long-term contracts also exposes the company to price volatility and supply disruptions.

#2 Export-related risks

Roughly one-fifth of Orkla India’s revenue comes from exports, with products sold in 45 countries. While this global presence adds diversification, it also exposes the company to risks linked to currency fluctuations, trade regulations, freight costs and local competition. 

In addition, varying food safety and compliance standards across markets, especially in regions like the EU and Qatar, can restrict exports or increase costs. Managing these complexities effectively remains crucial, as any disruption or non-compliance could impact revenues and profitability.

#3 Revenue concentration

Orkla India’s business remains heavily concentrated in South India, which contributes about 70 per cent of total revenue. The company’s manufacturing footprint is similarly regional, with most of its owned and contract facilities located in the South. It holds strong market leadership positions, such as a 31 per cent share in Karnataka and 42 per cent in Kerala, dominating both blended and pure spice segments. On the other hand, in states like Andhra Pradesh and Telangana, it is the second-largest player with around 15 per cent share. 

While this regional strength underpins Orkla India’s success, it also exposes the company to risks from economic, climatic or regulatory disruptions specific to South India.

Where will the IPO proceeds go?

Since the issue is entirely an offer for sale, all the proceeds from the IPO will go to the selling promoters and shareholders.

So, should you apply for the Orkla India IPO?

The Orkla India IPO may grab headlines, but steady compounding writes the real success stories.

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Also read: IPO investing: Is it the right strategy for you?