Orkla India eyes public listing after completing restructuring

The company announced in October 2023 that its India businesses would be reorganized into one entity, Orkla India. 

Orkla entered India in 2007 by acquiring packaged food company MTR, specializing in pickles, spices, vermicelli, and ready-to-cook mixes like idli and poha. In 2020, it acquired a majority stake in Kerala-based spice maker Eastern Condiments. 

Orkla India now has three business units—MTR, Eastern, and international business. 

Notably, spices make up roughly 70% of its business.

“We did a pre-IPO (initial public offering) study; we presented that to the board, and they said, ‘Why don’t you evaluate whether you want to look at the capital markets?’. This happened in June. So, we are in the process of evaluation. We are at a very early stage, and whatever will happen will happen maybe in 2025 or so,” Sanjay Sharma, chief executive of Orkla India, said on the sidelines of the World Food India 2024 held in the capital on Thursday.

The move signals the arrival of another packaged food player in the public markets after several large companies, such as Mrs Bectors Food Specialities Ltd (2020) and Bikaji Foods International (2022), saw success on the bourses.

India’s packaged consumer food market, including dairy, biscuits, snacks and sweets, baked products, and ready-to-eat meals, among others, is valued at ₹4.24 trillion, according to a 2024 report by brokerage Anand Rathi.

On track

Sharma said the restructuring of the newly formed entity is underway, and the integration of all businesses will take another 12 months to complete. 

“There are three kinds of distribution systems within our company. From an HR perspective, we are creating a single process across the entire organization. In manufacturing as well, we’ve got 11 factories…every factory has its own processes. We are looking at streamlining those processes. So, we are still in the process of integrating but at a deeper level. This will take us another year, at least.” 

Following the restructuring in 2023, Orkla India became the sixth-largest portfolio firm for the Norwegian parent, contributing an estimated 4% to its annual business. In 2011, Orkla India also bought ready-to-use spice maker Rasoi Magic, which is a 100% subsidiary of MTR.

Orkla India follows a January to December fiscal year.

Sharma said that while demand last year was “reasonably” good, muted consumption this year remains a cause of concern. FMCG volumes grew 3.8% year-on-year in the June quarter of 2023-24, slowing down both sequentially and from a year earlier, according to data from global marketing research firm NIQ.

“Last year, we ended up at ₹2,300 crore and saw reasonably good growth. So far, we are in tune with the harrowing experience that the industry is going through with the softness of consumption. The only good thing for us is, while India has seen food inflation, in spices we’ve seen deflation. So, we’ve seen raw material prices come down very sharply. We have rolled back prices on some packs,” Sharma said.