Orkla has confirmed it is exploring a public listing for its India business, which includes MTR Foods and Eastern Condiments.
The Nordic food and ingredients manufacturer said via a spokesperson that Orkla is “considering options to access the Indian capital markets”, adding that the “results of the IPO readiness study were encouraging”.
Orkla’s spokesperson told Just Food today (29 November) that the Norway-headquartered company “will now proceed with an evaluation” of that process but any decision on a potential IPO will not be made until “sometime” in the new year.
Bloomberg, quoting unnamed sources, said an IPO of the Indian business units would seek to raise $400m from the market, citing a valuation of around $2bn.
The news agency’s sources familiar with the matter suggested a Mumbai IPO of Orkla’s India operations could happen as soon as the next quarter, although they said ‘deliberations’ are ongoing.
Orkla acquired Bangalore headquartered MTR Foods in 2007, a manufacturer of vegetarian ready meals, ready mixes, spices and condiments.
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MTR Foods then bought Eastern Condiments, a producer of blended and single spices, pickles, snacks and frozen vegetables, in 2020.
In October, the Oslo-listed Orkla group revealed it booked Nkr657m ($59.3m) in third-quarter write-downs, partially related to its confectionery and snacks business.
Orkla said Nkr350m of the total was due to the reduction of “trademarks and goodwill” mainly due to the company’s Latvia operations within its confectionery and snacks division, one of 11 of the group’s portfolio companies.
Since taking charge two years ago, president and CEO Nils Selte has split the group into individual reporting divisions.
“Over the past two years, Orkla has been transformed into an industrial investment company, a process which has entailed major changes to Orkla’s operating model with increased independence and autonomy of the portfolio companies, including with regard to the selection of IT solutions,” the company explained in October.
Orkla said third-quarter group revenue to 30 September rose 4.3% to Nkr17.51bn and was up 3.6% year to date at Nkr51.86bn.
Group adjusted EBIT rose 13% in the quarter to Nkr2.1bn and increased 11% over the nine months to Nkr5.9bn.
Impacted by the write-downs, net profit across the portfolio companies dropped 18.8% in the quarter to Nkr1.3bn but was up 16% year to date at Nkr5bn.
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