IPO signals strong commitment from Norway parent, says Orkla India

This comes as the company's initial public offering is slated to open on 29 October to 31 October

Orkla India is the main priority for its Norwegian-headquartered parent, Orkla, an industrial investment company focused on brands and consumer-oriented businesses. The initial public offering (IPO) of the Indian unit is set to open for subscription on October 29.

 

“We are in the centre of the plate, as far as Orkla is concerned. Orkla is pretty much committed to us, and I think by doing this OFS (offer-for-sale) in India and bringing more investors into the company, the way to look at it is that we are committing to India in a very strong way, and we are building a stronger relationship with India,” Sanjay Sharma, managing director and chief executive officer at Orkla India, told Business Standard.

 

Orkla India has priced its IPO at ₹695-730 per share. The ₹1,667 crore offering is an offer-for-sale, with anchor investor bidding scheduled for October 28.

 

At the upper end of the price band, the company will be valued at ₹10,000 crore. The offer-for-sale comprises a dilution of 20.5 million shares by Orkla Asia Pacific and 1.14 million shares each by shareholders Navas Meeran and Feroz Meeran. 

 

Following the IPO, Orkla Asia Pacific’s stake in the company will fall to 75 per cent, while Navas Meeran and Feroz Meeran will each hold 4.2 per cent. Currently, Orkla Asia Pacific owns 90 per cent of the company, and the Meerans 5 per cent each.

 

Orkla India houses brands such as MTR, Eastern, and Rashi Magic.

 

Speaking about acquisitions, Sharma said the company’s approach has been consistent both in India and in other markets. “The business model that we run in India is actually a model that we’ve inspired out of Orkla, and it was only in 2022 that we converted ourselves from a branded consumer goods company to an investment company. That was largely because most of Orkla’s businesses in the branded consumer goods space were local, and local management needed more empowerment to run those businesses,” Sharma explained. 

 

On the recent government rationalisation of goods and services, Sharma said the new GST cuts apply to only 25 per cent of the company’s portfolio. “We have done all the necessary price play-outs in the market. Personally, I feel that from a portfolio-to-portfolio perspective, reducing prices does not necessarily lead to a sudden spike in sales. But I do think the government has taken significant steps to drive consumption in the country, putting more money into consumers’ hands,” he added.