Orkla India Limited, the entity behind popular Indian household brands like MTR Foods. And Eastern Condiments, is gearing up to launch its Initial Public Offering (IPO). The IPO is set to open on October 29 and close on October 31, with shares expected to list on BSE and NSE by November 6, while sized at ₹1,667. 54 crore, the public offering has a price band of ₹695-730 per share. However, ahead of this significant market event, the company's dividend distribution, particularly the substantial payout. To its foreign promoter for fiscal year 2025, has drawn considerable attention and raised questions.
The Dividend Payout Controversy
For the first time in its history, Orkla India Limited declared a dividend for fiscal year 2025, announcing a hefty ₹438 per share on a face value of ₹10. The total dividend payout amounted to ₹600. 01 crore. A significant portion of this — approximately ₹540 crore — was received by Orkla Asia Pacific. Pte, the foreign promoter of Orkla India, which holds a 90 percent stake in the company. The remaining two promoters, Navas Meeran and Firoz Meeran, each with a 5 percent stake, received ₹30 crore each, while what makes this payout particularly notable is that it far exceeds the company's net profits; Orkla India reported a net profit of ₹255. 69 crore for FY25 and ₹226. 33 crore for FY24. This move, where the company distributed nearly twice its annual profit as dividends, has become a talking point among investors and market observers ahead of the IPO.
Orkla India represents the Indian business arm of Orkla ASA, a renowned Norwegian industrial investment company. Orkla Asia Pacific, a regional unit of Orkla ASA, manages the company's operations across the Asia-Pacific region. In India, Orkla India boasts a diverse portfolio of spices, ready-to-cook, and ready-to-eat products, encompassing nearly 400 items, while these include a variety of curry powders, instant mixes, and snacks. The company enjoys a solid market presence, particularly in the southern Indian states of Karnataka, Kerala, Andhra. Pradesh, and Telangana, establishing itself as a key player in the Indian Fast-Moving Consumer Goods (FMCG) sector.
Orkla India's Business and Market Presence
Strong Financial Performance in Q1 FY25
In its recently concluded June quarter (April-June 2025), Orkla India demonstrated strong financial performance, while the company's net profit surged by 9. 8 percent year-on-year to ₹78, while 9 crore, up from ₹71. 9 crore in the corresponding period a year ago, while during the same quarter, revenue also saw a healthy increase of 6 percent, reaching ₹597 crore compared to ₹563. 5 crore in the June 2024 quarter. This growth underscores the increasing demand for the company's products and its solid market position, while among its listed competitors, Tata Consumer Products stands out as a significant peer in the market.
IPO Structure and Key Dates
The Orkla India IPO will entirely be an Offer For Sale (OFS) of 2. 28 crore shares. This implies that the company won't be raising fresh capital through the issuance of new shares; instead, existing shareholders will be divesting a portion of their holdings. The price band for the IPO has been fixed at ₹695-730 per share, with bidding open to investors from October 29 to October 31. Following the bidding period, the shares are anticipated to be listed on both BSE and NSE on November 6. It will be crucial for prospective investors to consider both the company's strong brand portfolio and the implications of its recent dividend payout decision when making their investment choices. The market's reaction to this IPO, especially in light of the dividend-related discussions, will be closely watched as Orkla India aims to further solidify its market presence and reach through this public offering. It's an interesting case where strong business fundamentals meet a unique financial decision, setting the stage for its market debut.
