Milky Mist Dairy Set to Launch Major IPO in India
Milky Mist Dairy's Upcoming IPO
Milky Mist Dairy Food Ltd. is gearing up to make its debut in the public markets with what could potentially be the largest initial public offering (IPO) in India's dairy sector. As reported by Bloomberg, sources familiar with the situation indicate that the Tamil Nadu-based company aims to launch the IPO by late July or early August, seeking to raise approximately Rs 2,035 crore (around $213 million). The company has successfully completed its investor roadshows and is progressing to the next phase of the listing process, although an official launch date has yet to be confirmed. The sources requested anonymity due to the confidential nature of the details.
The draft red herring prospectus (DRHP) reveals that the IPO will include a fresh issue of shares valued at up to Rs 1,785 crore, alongside an offer for sale (OFS) of up to Rs 250 crore from the founders. Additionally, Milky Mist has the option to raise up to Rs 357 crore through a pre-IPO placement, which could potentially reduce the size of the fresh issue if executed before the public offering opens. The funds raised from the fresh issue are intended for enhancing manufacturing capabilities and reducing existing debt, as outlined in the draft prospectus.
Dairy Sector Performance
Milky Mist's IPO is being launched at a time when publicly listed dairy companies have seen disappointing returns compared to the overall equity market. For instance, Parag Milk Foods Ltd. has experienced a nearly 20% decline this year, while Dodla Dairy Ltd. has dropped around 11%, and Hatsun Agro Product Ltd. has seen a decrease of about 7.5% during the same timeframe. Despite the lackluster performance in the sector, Milky Mist remains optimistic about attracting investor interest, having completed its marketing efforts with institutional investors prior to the anticipated listing.
The capital raised from the IPO is expected to bolster the company's production infrastructure, responding to the growing demand for value-added dairy products. A portion of the funds will also be allocated for debt repayment, which will aid in improving the company's financial standing. The IPO is being overseen by JM Financial Ltd., Axis Capital Ltd., and IIFL Capital Services Ltd., who are serving as the book-running lead managers for the offering.