Allots 1.51 crore shares to 17 anchor investors
Parag Milk Foods has raised Rs 342.85 crore by selling 1.51 crore shares to a total of 17 anchor investors ahead of the opening of the company's initial public offer (IPO). The shares were allotted to the anchor investors at Rs 227 per share, the top end of the Rs 220 to Rs 227 per share price band for the IPO.
Among the anchor investors, Nomura India Investment Fund Mother Fund will be allotted 22.02 lakh shares, Tata Balanced Fund will be allotted 19.21 lakh shares and Abu Dhabi Investment Authority - Behave will be allotted 14.23 lakh shares. Other investors include, Government Pension Fund Global, Morgan Stanley Mauritius Company and Copthall Mauritius Investment, among others.
The IPO of Parag Milk Foods, one of the leading manufacturers and marketers of dairy-based branded foods in India, comprises of fresh issue of equity shares aggregating up to Rs 300 crore and offer for sale of up to 2.05 crore shares from existing shareholders. The IPO opens for bidding today, 4 May 2016 and closes on 6 May 2016. The price band for the IPO has been fixed at Rs 220-227 per share.
The three investors who are selling shares via the IPO are India Business Excellence Fund (IBEF) which is a unit scheme of venture capital fund Business Excellence Trust, India Business Excellence Fund I (IBEF I) and IDFC Private Equity Fund III (IDFC PE) which is a unit scheme of venture capital fund IDFC Infrastructure Fund 3. IBEF is selling 21.09 lakh shares, IBEF I is selling 39.17 lakh shares and IDFC PE is selling 82.59 lakh shares via the IPO.
From the promoter group, Netra Shah is selling 20.04 lakh shares and Priti Shah is selling 11 lakh shares. Other selling shareholders are selling a combined 31.81 lakh shares.
The company will utilize the proceeds of the fresh issue of shares to fund the expansion and modernisation at its existing manufacturing facilities at Manchar in Pune and Palamaner in Andhra Pradesh and improving the marketing/distribution infrastructure. The company has earmarked Rs 147.70 crore the expansion and modernisation plan. It has earmarked Rs 2.29 crore for investment in its subsidiary for financing the capital expenditure requirements in relation to the expansion and modernisation of the Bhagyalaxmi Dairy Farm. A sum of Rs 100 crore will be used for partial repayment of the working capital consortium loan.
Promoted by Devendra Shah, Pritam Shah and Parag Shah, Parag Milk Foods manufactures a diverse range of products including cheese, ghee (clarified butter), fresh milk, whey proteins, paneer, curd, yoghurt, milk powders and dairy based beverages targeting a wide range of consumer groups through several brands. The company currently has aggregate milk processing capacity of 2 million litres per day. The cheese plant has a raw cheese production capacity of 40 MT per day. The company's two flagship brands are Gowardhan and Go.
The company operates a diary farm through its subsidiary Bhagyalaxmi Dairy Farms Private Limited. It is a fully automated cow farm housing over 2,000 holstein breed cows with superior quality yields. It produces farm-to-home premium fresh milk, which is marketed under the Pride of Cows brand in Mumbai and Pune.
Based on the consolidated financial performance, Parag Milk Foods registered net profit of Rs 31.92 crore on revenue from operations of Rs 1230.60 crore for 9 months ended 31 December 2015. The company reported net profit of Rs 25.96 crore on revenue from operations of Rs 1438.70 crore for the year ended 31 March 2015. The company has stated in its Red Herring Prospectus that it has not declared any dividend in the last five financial years. The company has no formal dividend distribution policy.
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