Listing boosts Orkla India’s appeal for talent and acquisitions: CEO Sharma
Norwegian consumer goods giant Orkla, which owns Indian spice brands such as MTR and Eastern, sees increased opportunities for talent acquisition and mergers and acquisitions (M&A) after listing its local subsidiary last year, a senior company executive said.
“An IPO has strengthened our reputation, helped us develop a platform that helps us attract talent and M&A opportunities,” Sanjay Sharma, managing director and chief executive officer of Orkla India, said at a panel discussion at the Mint India Investment Summit and Awards.
Beyond attractive valuations and greater flexibility for local growth, a domestic listing improves the company’s perception of potential acquisition targets, Sharma added.
Orkla India stated the following: ₹1,667 crore through an initial public offering (IPO) in November last year. The company’s shares fell 0.35 percent ₹591.25 per capita on BSE on Friday.
In the last two years, several multinational companies have listed their subsidiaries in India, including Hyundai and LG; This marks a resurgence in such listings after a lull since 2007, when companies such as Oracle and Maruti Suzuki moved into the public markets.
Indian markets are on the rise
During the panel discussion, Kaushal Shah, managing director and head of equity capital markets, Kotak Investment Banking, said interest in the current phase of renewed IPO activity in India has increased.
“Since 2023, the world has viewed India in a very different way, not just in terms of the premium it offers in valuation but also in terms of the strength of domestic capital,” Shah said, adding that more and more multinational companies are exploring listings of their Indian units.
Bhavesh Shah, managing director and head of investment banking at Equirus Capital, said India’s domestic capital pool has expanded significantly.
“India’s domestic pool has become the largest capital pool today. It has increased from 10% to 23%. There is a 13-fold increase in absolute value,” he said.
“The environment in India is a mature market in terms of regulation, capital markets, investment banking ecosystem and investors; even compared globally, it is a good market to access,” said Sharma.
Orkla’s listing journey
“On the other hand, there is a need for companies with great business models, financially sound and strong governance, but this tests your faith,” he added.
Sharing his experience of taking the company public, Sharma emphasized that consistent performance in public markets is important.
“You have to deliver and deliver on your promises. You can be a great company in your market, but that won’t necessarily get you the valuations in India, you have to perform to get that,” said Sharma.
Recent listings have also highlighted the gap that can arise between private market valuations and public market pricing.
Walmart-backed payments company PhonePe recently delayed its IPO plans due to volatility linked to geopolitical tensions and was expected to list at a valuation of around $10.5 billion; This was below the $14 billion valuation it achieved in a private financing round last year.
Similarly, artificial intelligence (AI) analytics firm Fractal entered the public markets in February at around $1.6 billion; This was down from its previous private valuation of about $2.4 billion.
Despite the slowdown in the IPO process, Kaushal Shah said there continues to be strong interest among companies looking to go public in India.
He added that previous listings were concentrated in sectors such as electronics, consumer and capital goods, but the current pipeline shows increased interest across all sectors.
