“We are exploring the timings and other activities. Our financials and product marketing are well set. Any of the IPO process will take ten to twelve months’ time. We are planning to raise around Rs 1,500-2,000 crore,” said K Rathnam, chief executive officer of Milky Mist Dairy. “We need to do some expansion on some value-added products. When you are talking about a national brand, you need to have a presence outside South,” Rathnam added.

Erode-based paneer to ice-cream maker Milky Mist Dairy Foods Pvt is all set to tap the public markets to raise funds for its expansion. The company is planning to raise around Rs 1,500-2,000 crore through an initial public offering (IPO) in the next 10 to 12 months at a valuation of Rs 20,000 crore.

 

Through this, the company will be following in the footsteps of other listed players including Hatsun Agro Product, Heritage Foods, Parag Milk Foods, and Dodla Dairy. Nestle, Britannia, and unlisted Amul are the other large players in the dairy products segment. The money will be used to increase its national presence and to expand its product portfolio.

 

“We are exploring the timings and other activities. Our financials and product marketing are well set. Any of the IPO process will take ten to twelve months’ time. We are planning to raise around Rs 1,500-2,000 crore,” said K Rathnam, chief executive officer of Milky Mist Dairy. “We need to do some expansion on some value-added products. When you are talking about a national brand, you need to have a presence outside South,” Rathnam added.

 

Rags to riches story

 

The story of Milky Mist’s promoter is a proper rags-to-riches or first-generation success story. Its founder, T Sathish Kumar, reportedly a class eight dropout, was hardly 17 years old when he started the company in 1994. Now, the company’s product portfolio includes producing paneer, curd, butter, cheese, yoghurt, and ice cream.

 

The IPO plan comes after the company tried to raise private equity capital at least three times, after talks with players like Peak XV Partners (formerly Sequoia Capital India), WestBridge, and others. “The process was taking a bit more time with private equity players. We were in the middle of our project execution activities at that time,” Rathnam said about the deals not working out. Before Milky Mist, Rathnam was the managing director of Amul Dairy.

 

During the last financial year, the company reported a topline of around Rs 1,940 crore and generated a profit of Rs 50 crore. “We are targeting a 40 per cent growth in topline with a target of Rs 2,700 crore during the current financial year. We will be able to reach that target mainly driven by our expansion to markets other than the South and also rapid growth in existing markets,” he added. The company is seeing 20 per cent organic growth within its existing market.

 

“In addition to this, ice creams, milkshakes, and beverages coming out of our new plant will be an added advantage of another Rs 250-300 crore in sales,” Rathnam said. During the current year, the company has lined up an investment of Rs 650 crore over a period of over two-and-a-half years, including a 60-tonne powder plant and a 100-tonne paneer plant. “We will focus on value-added products. The areas that we are looking at are Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh, in addition to NCR and Delhi.”

The story of Milky Mist’s promoter is a proper rags-to-riches or first-generation success story. Its founder, T Sathish Kumar, reportedly a class eight dropout, was hardly 17 years old when he started the company in 1994. Now, the company’s product portfolio includes producing paneer, curd, butter, cheese, yoghurt, and ice cream.

The IPO plan comes after the company tried to raise private equity capital at least three times, after talks with players like Peak XV Partners (formerly Sequoia Capital India), WestBridge, and others. “The process was taking a bit more time with private equity players. We were in the middle of our project execution activities at that time,” Rathnam said about the deals not working out. Before Milky Mist, Rathnam was the managing director of Amul Dairy.

During the last financial year, the company reported a topline of around Rs 1,940 crore and generated a profit of Rs 50 crore. “We are targeting a 40 per cent growth in topline with a target of Rs 2,700 crore during the current financial year. We will be able to reach that target mainly driven by our expansion to markets other than the South and also rapid growth in existing markets,” he added. The company is seeing 20 per cent organic growth within its existing market.

“In addition to this, ice creams, milkshakes, and beverages coming out of our new plant will be an added advantage of another Rs 250-300 crore in sales,” Rathnam said. During the current year, the company has lined up an investment of Rs 650 crore over a period of over two-and-a-half years, including a 60-tonne powder plant and a 100-tonne paneer plant. “We will focus on value-added products. The areas that we are looking at are Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh, in addition to NCR and Delhi.”

First Published: Jul 18 2024 | 6:08 PM IST