Orkla has announced its intention to pursue a public listing for its Indian operations, which encompass MTR Foods and Eastern Condiments. According to a spokesperson, the Nordic manufacturer of food and ingredients is actively “considering options to access the Indian capital markets,” noting that the findings of its IPO readiness evaluation were “encouraging.”
Orkla’s spokesperson indicated that the Norway-headquartered company is set to conduct a thorough assessment of the IPO process. However, any final decision regarding a potential initial public offering will be delayed until “sometime” in the upcoming year.
Bloomberg, citing anonymous sources, reported that Orkla’s IPO of its Indian business units aims to raise approximately $400 million, positioning the valuation at around $2 billion. Moreover, these sources hint that a public offering in Mumbai could occur as soon as the next quarter, although “deliberations” are still in progress.
The company significantly expanded its portfolio in India with the acquisition of MTR Foods in 2007. MTR Foods specializes in vegetarian ready meals, mixes, spices, and condiments. Furthermore, Orkla strengthened its market presence in 2020 by acquiring Eastern Condiments, a producer known for its blended and single spices, pickles, snacks, and frozen vegetables.
In recent financial disclosures, the Oslo-listed Orkla group revealed it experienced write-downs totaling Nkr657 million ($59.3 million) in the third quarter, which are partly attributed to its confectionery and snacks division. Of this amount, Nkr350 million was related to the devaluation of “trademarks and goodwill,” particularly concerning the Latvian operations within the confectionery sector, which forms one of the group’s 11 portfolio companies.
Since leading the company two years ago, President and CEO Nils Selte has restructured Orkla into distinct reporting divisions. He has emphasized that Orkla has transformed into an industrial investment company, a process that necessitated substantial changes to its operating model. This transformation has resulted in increased autonomy for portfolio companies, including their IT solution selections.
For the third quarter, Orkla reported a revenue increase of 4.3% compared to the previous year, reaching Nkr17.51 billion. Additionally, year-to-date revenue surged by 3.6%, totaling Nkr51.86 billion. Adjusted EBIT for the quarter rose by 13%, amounting to Nkr2.1 billion, while the nine-month total increased by 11% to Nkr5.9 billion. Conversely, net profit across the portfolio dropped by 18.8% in the quarter to Nkr1.3 billion, although it was up 16% year-to-date at Nkr5 billion.
In conclusion, Orkla’s planned IPO signals a strategic move aligned with ongoing developments in the food and beverage industry trends. Stakeholders are keenly monitoring how this could reshape Orkla’s footprint within the increasingly competitive Indian market.
