Milky Mist to Launch India's Biggest Dairy IPO in Early August
Milky Mist Dairy Food Ltd, a dairy firm focused on value addition, is anticipated to initiate its initial public offering (IPO) by mid-August, as per informed sources, marking the largest IPO by an Indian dairy firm.
The proposed size of the issue was Rs.2,035 crore, including the IPO and pre-IPO placement.
Reports indicate that the size of the issue now indicates a remaining amount of Rs.1,553 crore, after the company previously secured Rs.482 crore in a pre-IPO placement. The total fundraising plan remains unchanged with no cuts or modifications.
The firm’s entrance into the public market comes after a Rs.482-crore pre-IPO fundraising finished in May, spearheaded by Jongsong Investments Pte Ltd, a wholly-owned indirect subsidiary of Temasek Holdings. Using the pre-IPO investment price of Rs.139.76 per share, Milky Mist's valuation was around Rs.9,300 crore.
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In addition, Milky Mist is anticipated to secure as much as US$37.3 million (Rs.357 crore) through a pre-IPO placement, which, if finalized, would proportionally decrease the size of the new issue.
The company plans to use the funds from the new issue mainly to enhance its production facilities and improve its financial position by repaying debt.
The intended investment demonstrates Milky Mist’s ongoing commitment to expanding production capacity to address the increasing demand for premium and value-added dairy products throughout India.
Established in Erode, Milky Mist is dedicated solely to value-added dairy products. Its collection features paneer, cheese, curd, yogurt, butter, ghee, ice cream, and various dairy-related items. Milky Mist is not involved in the milk sector.
The matter involves a new issuance of equity shares along with a sale offer (OFS) from the current promoters Sathishkumar and Anitha Sathish.
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According to the Draft Red Herring Prospectus (DRHP), the funds from the new issue will be used for settling debts and enhancing and modernising its manufacturing plant in Perundurai. The growth is reported to involve the production of its newer products, including whey protein concentrate, yogurt, and cream cheese facilities.
JM Financial Ltd, Axis Capital Ltd, and IIFL Capital Services Ltd serve as the book-running lead managers for the offering. Other comparable companies in the industry are Parag Milk Foods Ltd, Hatsun Agro Product Ltd, and Dodla Dairy Ltd.
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Despite market challenges, analysts still perceive India's organised dairy sector as a potential for long-term growth, driven by a rise in consumption of branded dairy items, the development of cold chain infrastructure, and higher disposable incomes.
If launched successfully, the Milky Mist IPO is anticipated to be a significant event for the Indian dairy market, showcasing increasing investor enthusiasm for structured dairy enterprises and bolstering trust in India's thriving dairy processing industry.