Erode-based Milky Mist Dairy Food Ltd, a leading player in value-added dairy products, has secured approval from the Securities and Exchange Board of India (SEBI) to launch its ₹2,035 crore initial public offering (IPO). The public issue aims to strengthen the company’s financial position and support its nationwide expansion strategy.
IPO Structure and Fund Utilisation
The IPO will comprise a ₹1,785 crore fresh issue and a ₹250 crore offer-for-sale (OFS) by promoters Sathishkumar T and Anitha S. A pre-IPO placement of up to ₹357 crore has also been proposed, which would reduce the size of the fresh issue if executed.
The company plans to utilise the proceeds as follows:
- ₹750 crore for debt repayment
- Funding capital expenditure, working capital, and general corporate purposes
The issue will be managed by JM Financial, Axis Capital, and IIFL Capital Services.
Operational Challenges and Risks
Milky Mist’s dependence on a single manufacturing facility poses a potential operational risk, while its regional revenue concentration remains high, with 71% of sales originating from Tamil Nadu and Karnataka. Additionally, raw milk price volatility continues to pressure profit margins.
The company also faces intense competition from major dairy and FMCG players such as Amul, Nestlé India, Britannia, Hatsun Agro, and Parag Milk Foods.
Company Outlook
Founded in the 1990s by entrepreneur Sathishkumar T, Milky Mist has built one of India’s most recognised private dairy brands without institutional backing. Under the leadership of CEO K. Rathnam (formerly with Amul), the company plans to deleverage, enhance liquidity, and expand capacity using IPO proceeds.
With SEBI’s approval, Milky Mist joins a growing list of consumer-facing brands preparing to tap public markets amid renewed investor appetite for FMCG and dairy sector listings.
Summary:
Milky Mist Dairy has received SEBI’s approval for its ₹2,035 crore IPO, including a ₹1,785 crore fresh issue and ₹250 crore OFS. Funds will be used for debt repayment, expansion, and working capital. Despite operational concentration risks, the company aims to boost growth and liquidity through its public debut.
Disclaimer:
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