Tamil Nadu-based dairy firm files papers for ₹2,035cr IPO
What's the story
Milky Mist Dairy Food Limited, a leading Tamil Nadu-based dairy brand, has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company is planning to raise up to ₹2,035 crore through an initial public offering (IPO). The offer has a fresh equity issue of ₹1,785 crore and an offer for sale (OFS) worth ₹250 crore by the firm's promoters.
Fund allocation
IPO proceeds will be used for various purposes
The company plans to use ₹750 crore from the fresh issue for debt repayment/prepayment and ₹414 crore for expansion and modernization of its Perundurai manufacturing facility. An extra ₹129 crore is earmarked for buying visi coolers, ice cream freezers, and chocolate coolers. The rest of the funds will be used for general corporate purposes as per SEBI regulations.
Business
A look at the financials
Unlike traditional dairy companies, Milky Mist doesn't sell liquid milk. This allows for better margins and a business model similar to fast-moving consumer goods (FMCG) firms. The company operates fully automated manufacturing facilities with an in-house logistics system for end-to-end distribution. For FY25, Milky Mist reported an operational revenue of ₹2,349 crore and an EBITDA (operating profit) of ₹310 crore.
Product diversity
Milky Mist connects with over 67,000 farmers
Headquartered in Erode, Milky Mist specializes in value-added dairy products such as paneer, cheese, yogurt, ice cream, butter, and ghee. The firm directly connects with over 67,000 farmers to ensure a steady supply of high-quality milk. It also boasts one of India's largest paneer production capacities at 150 metric tons per day.