The Orkla India IPO hits the markets on 29 Oct 2025. The Company is valued at Rs.10,000 Crore and the IPO is for Rs.1,667 Crore. The IPO boasts of two strong brands, viz, MTR, Bengaluru and Eastern Condiments, Kerala and also the minor brand Rasoi Magic.
Little of History
It would be interesting to note that MTR was founded in 1924 with the name Brahmin Coffee Club as a vegetarian restaurant in the place Mavalli, near Lalbagh, Bangalore, by Parampalli Yagnanarayana Maiya and his brothers, who were part of a traditional South Indian Brahmin family. In 1960, it was renamed Mavalli Tiffin Rooms (MTR) after the locality and known for its pure vegetarian South Indian fare, including dosas, idlis, and filter coffee. The Restaurant is also credited with the innovation of the famous Rava Idli using Semolina instead of rice, during World War II when there was severe rice shortages. MTR became a culinary institution in Bangalore, known for its quality, hygiene, and traditional recipes. In 1976, it began selling ready-to-use spice mixes and instant foods to meet growing demand from loyal customers. It expanded into packaged masalas, pickles, and ready-to-eat meals, in the 1980s targeting urban households and NRIs, exporting to the Middle East. Even now, the restaurant business remains under the Maiya family.
In 1996, as part of company restructuring, the new company, MTR Foods Pvt Ltd was formally incorporated to scale its packaged food business and introduced breakfast mixes, frozen foods, and sweets like Gulab Jamun and Rasgulla. As part of building its brand, it focused on authenticity, vegetarian purity, and convenience, positioning itself as a heritage brand with modern appeal. In 2007, the Maiya family sold the company lock, stock and barrel, to Orkla ASA, Norway at Rs.360 crore which found MTR as a readymade platform for its foray into the Indian FMCG market.
Eastern Condiments was founded in 1983 by M.E. Meeran in Kochi, Kerala. It's core business was blended and single spices, masalas, RTC (ready-to-cook) and RTE (ready-to-eat) products and had a strong presence in South India and export markets across the Middle East and South East Asia. Eastern Condiments built its reputation on quality spice blends and became one of Kerala’s most trusted food brands, with seven factories across four states and around 3,000 employees. In March 2021, Orkla ASA, Norway acquired Eastern Condiments through MTR Foods Pvt Limited at a valuation of Rs.2000 Crore. However, the Meerans sold only 90% stake and retained 10% with themselves.
Orkla ASA, Norway, in 2011, acquired Pune based Rasoi Magic Foods (India) Private Limited through MTR Foods Pvt Limited. Rasoi Magic focussed on ready-to-cook spice mixes and gravies, especially North Indian cuisine and “no onion, no garlic” variants for Gujarat and Maharashtra markets.
With these three companies in its pocket, it renamed MTR Foods Pvt Ltd to Orkla India Ltd. in 2023 and has valued it at Rs.10,000 crore. The company now has 90% ownership by Orkla India and 10% between Meeran brothers.
The IPO Offer for Sale
The IPO is full "Offer for Sale" for Rs.1667 Crore - Face Value per share is Re.1/- and offered at upper band premium price of Rs.730/-. This high premium over face value reflects the company’s strong brand equity, profitability, and market positioning in the Indian packaged food sector. After the IPO, promoter shareholding of Orkla ASA, Norway and the Meeran family in Orkla India will reduce from 90% to approximately 73.4%. The 26.6% Offer for Sale is allocated to QIBs upto 50%, 15% for HNIs and 35% for retail investors.
Orkla India’s CEO emphasized that the IPO is not an exit for the Meerans but a step toward broader market participation. The Meerans remain influential stakeholders, with deep operational and cultural ties to the Eastern brand and its South Indian market base.
Financial Highlights
- EBITDA Margin: ~15%
- RoCE: 32.7%
- Cash Conversion: 124.8%
- Revenue Mix: ~65% from spices, ~33% from convenience foods
Cash Conversion Ratio (CCR) measures how effectively a company turns its operating profit (typically EBITDA) into free cash flow (FCF)
Free Cash Flow (FCF): Cash from operations minus capital expenditures (CapEx)
CCR greater than 100% means the company is generating more cash than its reported operating profit.
124.8% implies that for every ₹100 of EBITDA, Orkla India generates ₹124.80 in free cash.
This can result from:
- Low capital expenditure
- Strong collections and inventory turnover
- Non-cash adjustments or timing benefits
More free cash means greater ability to pay dividends or reinvest.
Investors often reward companies with high CCR due to predictable cash flows.
Valuation: Roughly half the valuation multiple of Tata Consumer Products, making it relatively attractive.
Finally, the Brahmin family which founded the MTR Foods Pvt Limited is nowhere to be found. The company ownership fully rests with Orkla ASA, Norway and Meeran brothers with 75% and 25% now offered for public float.
Orkla India’s Growth Strategy
1. “Go Deep, Not Wide” Market Focus
- Example: In Karnataka, per capita sales rose from ₹16 in 2007 to ₹110 in 2025, yet that’s just 1% of the packaged food market—indicating massive headroom.
2. Convenience Food Expansion
- Orkla plans to increase the share of ready-to-cook and ready-to-eat products, capitalizing on changing consumer lifestyles.
3. Export Growth
- Plans include scaling exports to North America and Southeast Asia, leveraging MTR and Eastern’s brand equity
4. Strategic Acquisitions
- The company is open to acquiring regional brands that complement its portfolio, especially in underpenetrated categories or geographies.
5. Channel Optimization
- E-commerce is growing at 40% YoY, and Orkla plans to scale digital channels aggressively.
6. Capacity Utilization & Efficiency
My opinion
The company is cash rich and doesn't need capex as it is presently at 46% capacity utilisation.
The only reason for the IPO is for increasing the liquidity of the existing shareholders through OFS.
Even after dilution of 26% shares, the Norway company still has significant stake at 76%.
Therefore, Invest in the IPO as the company commands market share and also financially strong.
