Orkla India Limited's Initial Public Offering (IPO) has garnered significant investor interest on its second day of bidding. The public issue has been subscribed 79% overall so far, indicating strong demand for the company's shares. The Grey Market Premium (GMP) for Orkla India shares has also shown a positive trend, currently trading at a premium of +₹68, reflecting optimistic sentiment among investors regarding potential listing gains.
Subscription Details Unveiled
As per data from the National Stock Exchange (NSE), the IPO has received bids for 1,25,56,940 shares against a total offer of 1,59,99,104 shares. The Non-Institutional Investors (NIIs) category has shown particularly strong enthusiasm, subscribing 1, while 53 times their allocated quota. Retail Individual Investors (RIIs) have also responded positively, with their segment witnessing 90% subscription. Meanwhile, the Qualified Institutional Buyers (QIBs) segment has been subscribed 2%, which is a typical pattern in the early days of an IPO as institutional bids often come in during the final hours of the offering.
Grey Market Premium (GMP) Insights
The Grey Market Premium (GMP) for Orkla India IPO shares stood at +₹68 on Thursday morning, as per updates at 7:53 AM, while this premium, when considered against the upper price band of ₹730, suggests a potential listing gain of approximately 9. 3%. A healthy GMP often reflects strong market confidence and strong investor. Demand, bolstering expectations for a favorable debut on the stock exchanges. Analysts note that at the upper price band, Orkla India is available at a P/E of 31. 7x, which appears reasonably priced when compared to its industry peers.
Key IPO Specifications
The Orkla India IPO, which opened for anchor investors on October 29 and for public subscription. From October 30 to October 31, 2023, has set its price band at ₹695-₹730 per equity share. The company aims to raise ₹1,667. 54 crore through this offering, which is entirely an Offer for Sale. The shares are tentatively scheduled to be listed on November 6, 2023, on both BSE and NSE. At the upper price band, Orkla India is valued at approximately ₹10,000 crore. Notably, the company successfully raised nearly ₹500 crore from its anchor investor round on October 29, underscoring institutional confidence.
Understanding the Offer for Sale (OFS)
It's crucial for prospective investors to understand that the Orkla India IPO is entirely an Offer for Sale (OFS), while this means that 2. 28 crore equity shares are being offloaded by existing promoters and shareholders, including Orkla Asia Pacific Pte, Navas Meeran, and Feroz Meeran. Consequently, the entire proceeds from the IPO will go directly to these selling shareholders and won't be infused into the company for its operations, expansion plans, or debt reduction. This structure primarily provides liquidity to existing stakeholders rather than raising fresh capital for the company's growth initiatives.
About Orkla India Ltd
Formerly known as MTR Foods, Orkla India is a prominent multi-category Indian food product company. Its extensive product portfolio includes a diverse range of items such as spices, ready-to-eat meals, sweets, and breakfast mixes. The company markets its wide array of products under popular and well-established brands like MTR, Rasoi Magic, and Eastern, thereby maintaining a significant presence in the Indian culinary landscape. Its offerings cater to various dietary preferences and cooking needs, solidifying its position in the competitive food industry, while currently, Orkla Asia Pacific Pte Ltd and the Norwegian industrial investment company Orkla ASA hold a 90% stake in the company, with Navas Meeran and Feroz Meeran holding 5% each.
