Mumbai-based Parag Milk Foods Private Limited, which has recently raised Rs 150 crore from IDFC private equity fund, is considering to go public for a investment requirement of around Rs 450 crore once the capital markets turn conducive to issue public offer.
"We will finalise our investment plans ahead of the public issue, which we intend to do in next one and half years time," Devendra Shah, chairman, Parag Milk Foods said here today.
The company is planning to expand its procurement and manufacturing footprint beyond Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu by setting up one plant each in the North and the Eastern parts of India for which it seeks to raise money from public.
It had so far raised private equity in two rounds the first being Rs 55 crore fund from Motilal Oswal. The percentage of equity stake to be given to Oswal and IDFC is yet to be determined as the matter is linked to the performance of the company, according to Parag management.
The company currently handles a procurement of 2 million litres of milk per day, 85% of which goes into making value added products through its brands 'Govardhan' and 'Go' unlike its counterparts in AP who mainly deals with liquid milk business, according to Shah. The company expects to achieve Rs 1,200 crore turnover this year as compared to Rs 870 crore in the last financial year.
Rs 80 crore expansion in AP
Parag currently runs a processing and value added products manufacturing plant at Palamaner in Chittoor district which it had set up at an investment of Rs 110 crore.
Shah said they would be investing another Rs 80 crore in two tranches for the capacity expansion by March next year. The company's plant has a capacity to process 800,000 litres of milk and it would go up to 1.3 lakh million litres after the capacity expansion. He said the company would increase the daily procurement of milk in AP to 1 million litres from the present 600,000 litres level as the expansion progresses.