In today’s Finshots, we talk about the Orkla India IPO, better known as the parent company of MTR Foods, Eastern and Rasoi Magic, which closes for subscription tomorrow (October 31st).

The Story

Take a quick look at your kitchen jars or recall the last few meals your family cooked. If you’ve made sambar, curry, rasam, or even a lip-smacking biryani lately, chances are you have this company to thank. We’re talking about Orkla India, better known for its subsidiaries, MTR Foods and Eastern Condiments. In a market where most players chase snacks, sweets, and dairy, it has stuck to its spice roots and taken them global.

And now, after nearly two decades of simmering success, the company is ready to serve its next course — an IPO worth ₹1,667 crore, which is a complete offer for sale (OFS). Meaning, none of that money goes to the company. Instead, the Norwegian parent, Orkla ASA, is cashing out a portion of its stake after 18 years in India.

To give you a bit of context, Orkla is headquartered in Norway, and its Indian story began in 2007, when it acquired MTR Foods for ₹353 crore.

But how exactly did MTR come to be? Well, the legacy actually began as a restaurant, way back in 1924, when Mavalli Tiffin Rooms opened its doors in Bengaluru. It became a household name for authentic South Indian meals. And over time, the restaurant’s success led to the creation of MTR Foods, which began selling packaged mixes so people could recreate those flavours at home.

And that’s how, through MTR Foods, Orkla got a taste of what India truly wanted: consistency without compromise. Over time, it acquired Rasoi Magic in 2013 and Eastern Condiments in 2021, a Kerala-based spice major with a loyal following. Finally, in 2023, these diverse flavours came together under one roof as Orkla India, a spice powerhouse with its heart in South India and its mind set on the world.

Spices, of course, are what put India on the map. Nobody produces, consumes, or exports as much as India does. But here, spices aren’t just a commodity. They’re culture. A single flavour rarely fits all. That’s why regional specialists like MTR and Eastern thrive in the South. The region alone accounts for 35% of India’s spice market, more than any other part of the country.

Plus, spices are just one slice of a much bigger story — India’s packaged foods industry, which includes everything from flour and oils to dairy and meat, and is worth a staggering ₹17 lakh crore. Within that, Orkla India’s addressable market of spices and convenience foods, stands at about ₹42,400 crore, projected to grow at nearly 11% per annum till 2029.

But then it wasn’t always like this because a few generations ago, families bought whole spices and took them to the local mill, fine-tuning the proportions to their own taste. The smell of freshly ground masalas filled every neighbourhood. But as cities grew busier and kitchens smaller, convenience became the new luxury. And that’s how packaged spices exploded. Today, just eight major brands control 57% of the market, split between pure spices (which form 66% or about ₹23,000 crore) and blended spices (the rest 34% amounting to ₹11,500 crore).

So how does Orkla India stand apart in this market, you ask?

By not just being a spice company anymore but diversifying into a six-category FMCG player. From masalas and ready-to-eat meals to vermicelli, sweets, pickles, and snacks, it’s managed to sneak into every pantry shelf. On the other hand, competitors like Tata Consumer Products (TCP), Aachi, GRB, and Everest cover only four or five categories at most.

And if you look behind the scenes, Orkla India follows a hybrid production model, with 1.82 lakh tonnes made in-house across 9 factories, while outsourcing to 21 partner units in six Indian states and a few overseas. This is in line with industry practice and it keeps costs efficient.

Its distribution network is just as vast. With 834 distributors, 1,888 sub-distributors, and 6 quick and e-commerce partners,  it has the kind of reach most FMCG firms crave. But the real stronghold remains the South, where the Eastern Condiments acquisition nearly doubled its household reach in Karnataka from 8.8% in 2021 to 20% by 2024. Some states like Telangana saw almost ten fold expansion in market share (from just 1.5% to 12.7%) in the same period.

Looking at the numbers, the company has kept pace with growth, earning ₹2,394 crore in FY25, with 79% of its revenue coming from India, an EBITDA (operating profit) margin of 16.6% and a profit margin of 10.7% (₹255 crore). Between FY22–FY25, it clocked an EBITDA CAGR (compounded annual growth rate) of 18.6%, while its ROCE (return on capital employed),  a measure of how efficiently a company turns its investments into profits, stands at 32.7%. For comparison, that’s well ahead of TCP’s 24.6%.

TCP also posted ₹17,618 crore in revenue, with slightly lower margins but a faster 12.3% CAGR. In contrast, Orkla India’s 9.2% CAGR reflects a steadier, premium-focused growth.

Coming to the IPO, the price band is set at ₹695–₹730 per share, valuing the company at around ₹10,000 crore. That’s a fraction of TCP’s ₹1.14 lakh crore market cap. But that’s part of its charm: it’s a niche FMCG player with healthy margins.

Orkla India has built a strong, domestically driven business. But even a well-run spice empire has its share of risks. The spice trade is famously volatile and prices fluctuate with harvests, weather, and global demand. In FY25, for instance, raw and packaging materials alone made up 56% of total expenses (₹1,174 crore). So any shift in the weather, fall in harvests or impact to its 216 suppliers can be bad for business.

Which brings us to supplier concentration risk. A third of the raw materials come from just 10 suppliers. Add to that foreign parent dependency, since Orkla’s Norway-based parent will continue to hold a majority stake and provide crucial services to its India arm.  In such a setup, even a small disruption, be it a delayed shipment, a policy change, or a strained partnership, can set off a butterfly effect, rippling from the supply chain all the way to the packaged spice blends.

Then there’s storage. Spices have a short shelf life, and because of that, any mishandling or a hint of moisture could ruin entire batches. 

You also need to look at exported goods, which face strict food safety standards, especially after last year’s “masala scare.” While Orkla India’s brands weren’t necessarily named in the list of contaminated spices, the international spectacle caused a dent to the Indian spice industry. Compliance builds global trust and pricing power, but one slip-up, even beyond the company’s control, can invite costly recalls and reputational damage.

And lastly, there's the legacy risk. Today, nearly a century later, the restaurants and the packaged food business are entirely separate. The original restaurants that built the MTR legacy now operate independently and only license the MTR name, while Orkla India owns and runs MTR Foods. Yet that shared legacy cuts both ways. So any slip-up on the restaurant side, even though Orkla has no control over it, can still ripple into the packaged food brand’s reputation.

So yeah, Orkla India’s IPO offers more than just a play on packaged foods. It’s a bet on how global expertise can blend with local taste. Strong margins, a focused product line, and deep regional loyalty make it a steady FMCG contender. But the spice business can be unpredictable. One wrong mix in pricing, supply, or perception can tip the balance fast. And only if Orkla India can manage that volatility while keeping its local flavour intact, its market debut might just turn out to be as flavourful as the products it sells.

Until then…

Fun Fact: The MTR restaurant used to call itself the Brahmin Coffee Club. After moving to Bengaluru’s Mavalli locality near Lalbagh, it earned the name we know today: Mavalli Tiffin Rooms.

If this story helped you understand what’s really cooking behind Orkla India’s IPO, share it with your friends, family, or even your foodie group chat over WhatsApp, LinkedIn and X. And don't forget to subscribe to Finshots!

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