Milky Mist gears up for Rs 2,000 cr IPO at a valuation of Rs 20,000 cr

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

Erode-based paneer to ice-cream maker Milky Mist is poised to tap into the public markets for an initial public offering (IPO) to fuel its expansion plans, a senior company executive said.

The company is planning to raise around Rs 1,500-2,000 crore through the IPO over the next 10 to 12 months at a valuation of Rs 20,000 crore.

It will be following the footsteps of other listed players like Hatsun Agro Products, Heritage Foods, Parag Milk Foods, and Dodla Dairy. Nestle, Britannia, and unlisted Amul are the other major players in the dairy products segment.

"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. 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. 

Milky Mist founded by T Sathish Kumar, a high school dropout, in 1994, is one of the classic examples of entrepreneurial ingenuity in India.

Over the years, it began expanding to value-added products such as curd, butter, cheese, yogurt, and ice- cream, by tapping into an upwardly mobile consumer base in India.

The IPO plan comes after the company tried raising private equity capital on at least three occasions, 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 during that time," Rathnam explained.

During the previous financial year, the company reported a top line of around Rs 1,940 crore and generated profits of Rs 50 crore.

"We are targeting a 40 per cent growth in the top line with a target of Rs 2,700 crore during the current financial year. We will be able to reach that target driven by our expansion to markets other than South and also the rapid growth in existing markets," he elaborated.

The company is seeing a 20 per cent organic growth in its existing market.

"Ice-creams, milk-shakes, 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 the next two-and-a-half years, including a 60-tonne powder plant, and a 100-tonne paneer plant.

"We will focus on value-added products. We are looking at Maharashtra, Gujarat, Rajasthan, and Madhya Pradesh, in addition to Delhi-NCR,” he added.

Expansion plan

> The company reported a topline of around Rs 1,940 crore and generated a profit of Rs 50 crore

> It is targeting a 40% growth in topline this financial year

> Capex plans of Rs 650 crore for next two-and-a-half years

> Targets valuation of Rs 20,000 crore for IPO