The Initial Public Offering (IPO) of Orkla India, the parent company of iconic food brands MTR and Eastern, saw a moderate response on its first day of bidding, achieving 27 per cent subscription by midday. The rupees 1,667.54 crore issue opened for subscription today.
The subscription was primarily driven by the employee and retail segments; the portion reserved for employees was the first to be fully subscribed, seeing bids for 1.29 times the shares on offer.
The Retail Individual Investors (RII) portion was subscribed to 30 per cent, while the Non-Institutional Investors (NII) category saw 33 per cent subscription. The Qualified Institutional Buyers (QIB) portion is yet to see significant bidding, a common trend as institutional investors typically place their bids on the final day of the offer.
Market Sentiment and GMP
In the unofficial grey market, Orkla India's shares are heading at a steady premium. The Grey Market Premium (GMP) is currently reported in the range of rupees 77 to rupees 84 per share.
At the upper end of the IPO price band (rupees 730), this GMP suggests a potential listing gain of approximately 10.5 per cent to 11.5per cent. While the GMP is an unofficial indicator, it reflects positive sentiment from the market ahead of the listing.
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Issue Details and Key Dates
IPO Dates: The public offer is open from October 29 to October 31, 2025.
Price Band: The company has fixed the price band at rupees 695 to rupees 730 per equity share.
Issue Structure: The IPO is entirely an Offer for Sale (OFS) of 2.28 crore equity shares by its promoter and other selling shareholders. This means the company itself will not receive any proceeds from the issue.
Lot Size: Retail investors can bid for a minimum of one lot, which contains 20 shares. At the upper price band, this is a minimum investment of rupees 14,600.
Tentative Listing: Shares are expected to be allotted on November 3, with a tentative listing date of November 6 on both the BSE and NSE.
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Overview and Valuation
Orkla has a dominant market position in South India, along with its strong brand recall with MTR and Eastern, and a robust financial profile. The company is virtually debt-free and boasts a strong Return On Capital Employed (ROCE) of over 32 per cent.
Risks primarily revolve around the fact that the issue is a 100 per cent OFS, meaning the funds will go to the selling shareholders and not to the company for growth.
On the valuation front, at the upper price band, the company is valued at a Price-to-Earnings (P/E) multiple of approximately 32x-39x (based on FY25 earnings). This valuation is considered attractive when compared to its only listed peer, Tata Consumer Products Limited, which trades at a significantly higher P/E multiple of around 90x.
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