Orkla IPO GMP Update: Lukewarm Start With 30% Subscription; Should You Apply?
The upcoming IPO from Orkla India Ltd. is drawing attention in the Indian primary market. Market players are watching the grey market premium (GMP) closely as a gauge of listing expectation and general appetite for this issue.
What’s the Issue & Key Details
Orkla India is launching an initial public offering (IPO) of approximately ₹1,667 crore through an Offer-for-Sale (OFS) route (no fresh capital raised). The price band has been fixed at ₹695-₹730 per share.
The issue opens for subscription on 29 October 2025 and closes on 31 October 2025. Allotment is expected around 3 November and listing is tentatively on 6 November 2025. The IPO is purely an existing share sale by promoters and major shareholders, not raising new funds for the business.
How Is the Orkla IPO GMP Faring?
The grey market premium (GMP) is an unofficial but widely monitored indicator of listing expectations and investor sentiment ahead of an IPO. At the time of writing:
- GMP for the Orkla IPO spiked to around ₹114 per share, suggesting potential listing at ~₹844 (based on the upper band of ₹730 + ₹114), i.e., ~15% premium.
- Some platforms still report a slightly lower premium in the range of ~₹84 to ₹108 per share.
- Despite this, the overall subscription by day 1 was reportedly around 30%, described by some media as a “lukewarm” start. (While the exact full figure may vary, early reports suggest modest uptake).
Therefore, while the GMP suggests some expectation of positive listing gain, the cash subscription momentum appears less vivid. This dual signal may reflect investor caution.
Why the Mixed Signal?
Several reasons may explain the divergence between GMP optimism and slower subscription:
- The strong brand portfolio of Orkla India (owner of brands like MTR, Eastern) gives credibility, which supports a decent GMP.
- On the flip side, since this is a pure OFS (no fresh issue), some retail investors may be cautious because no incremental capital enters the business for growth.
- Valuation considerations: At the upper band, the company is trading at a pre-issue P/E of ~34-39x, which some analysts view as “fairly valued” rather than undervalued.
- The broader IPO market has cooled somewhat, and investors doing stock research on primary offerings may be selective now rather than chasing every listing.
- Macro-risk and sector concerns: While packaged food is considered defensive, input cost inflation, supply chain risk, and competition remain.
How Does Orkla India Compare With Peers & Context
In the landscape of consumer-FMCG IPOs, Orkla India’s profile is strong in terms of brands, debt-free status, and regional leadership. Analysts note:
- Revenue ~₹2,394.7 crore in FY25, with EBITDA margin ~16.6%, PAT margin ~10.7%.
- Return on capital employed (ROCE) ~ 32.7% as per FY25 pre-issue numbers.
- Despite solid fundamentals, its listed peer, Tata Consumer Products Ltd, trades at a much higher P/E (~90x), albeit with scale and a different business mix.
From a stock market viewpoint, for investors applying to this IPO, the key is: do you believe the listing premium will materialise, and does long-term business growth justify the valuation? While some IPOs (in tech or AI stocks) promise hyper-growth, a consumer packaged goods company like Orkla India offers steadier but lower growth potential.
Should You Apply? Our View
Here are our thoughts on whether to apply for the Orkla IPO:
Reasons to consider applying
- Brands and business model are strong: A well-known product portfolio, debt-free business and healthy margins suggest long-term stability.
- GMP indicates some listing gain possibility (10-15% or more), which may appeal to retail investors looking for listing arbitrage.
- If one believes in the secular growth of India’s packaged food market (and does credible stock research), this IPO provides exposure.
Reasons to be cautious
- The subscription so far is modest (~30%), which may indicate limited investor enthusiasm or higher risk perception.
- Valuation at the upper band already reflects some of the business’s growth, a lesser margin of safety compared to deeply discounted offerings.
- Being a pure OFS, the company does not receive fresh funds for growth, so execution is entirely on existing business.
- The business faces input cost inflation, supply chain disruption, and competitive intensity. These may erode margins over time.
Our takeaway
If you are a retail investor looking for moderate risk and willing to hold for the long term, applying at the lower end of the price band could be reasonable. If you are more risk-averse or expect exceptional listing gains (as in high-growth tech or AI stocks), this IPO may look less exciting in comparison. Always do your own stock research and ensure position sizing fits your risk profile.
Key Things to Watch After Allotment
Once the allotment results are out, monitor these:
- Actual listing price compared with the GMP implied listing number.
- Share performance in the first 30 days – how much premium/dip vs issue price.
- Post-listing trading volume and stability – strong volume supports sustained gains.
- Business updates: any change in margin trends, input cost movement, supply chain risk.
- Broader market sentiment: how the IPO market is behaving, especially for the consumer and FMCG sectors.
Conclusion
The Orkla IPO GMP is reflecting moderate optimism (10-15% premium implied), but the early subscription rate (~30%) signals caution. The company has a solid brand and business model, but the valuation and offering structure (OFS) reduces some of the luster. For investors focused on fundamental stock market value and a long-term horizon, this could be a decent addition.
For those seeking quick listing gains or high-growth momentum akin to tech or AI segments, the appeal may be muted. As always, do your own homework and align your decision with your risk tolerance and investment horizon.
FAQs
The grey market premium (GMP) for the Orkla India IPO is currently in the range of ~₹84 to ~₹114 per share, based on recent reports. This premium suggests that in the unofficial market, buyers are willing to pay ~10-15% above the upper issue price band of ₹730, implying a possible listing price of ~₹814-₹844. It is a sign of listing gain expectation, but not a guarantee.
Several factors could contribute: some retail investors may be cautious due to valuation, others may prefer other IPOs. Since the issue is a pure OFS (no capital goes into the company for expansion), some investors may see less growth potential. Also, overall IPO market sentiment may be more selective now.
It depends on your investment goal. If you are comfortable with moderate risk, seeking decent listing gains or long-term ownership in a stable consumer business, then applying (especially at the lower part of the price band) could be reasonable. If you are chasing high growth (like AI stocks) or expect double-digit listing gains, this IPO may be less exciting. Always do thorough stock research and ensure you are comfortable with the business and valuation.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
