June 12, 2018
Dodla Dairy, a leading dairy company in South India, plans to strike the primary market with a Rs. 500-crore initial public offering. Dodla, which will be valued at Rs. 3,000 crore, has hired investment banks Edelweiss and ICICI Securities to run the process, said people aware of the development. Through this IPO, existing investor Rise Fund, managed by US-based PE fund TPG Growth, will make a partial exit. At present, Rise Fund holds an about 25 per cent stake in Dodla. Dodla Dairy, founded by Sunil Reddy in 1998, sells about 11 lakh litres of milk and 6 tonnes of milk products a day. In 2016-17, it posted revenue of Rs. 1,413 crore. The preliminary draft red herring prospectus for the IPO is likely to be filed in a couple of months, said one of the people. “Rise Fund plans to dilute as much as a 10-12 per cent stake.”
Dodla Dairy plans to utilise the proceeds to set up more units and for global expansions with the new shares in the market. It is aiming for opportunities in global markets like Europe and Africa through multiple buyouts, he added.
Dodla competes with dairies such as Hatsun Agro, Tirumala Milk Products, Vijaya, Jersey, Mother Dairy, Heritage, Creamline Dairy in south and Nandini Milk, which is part of the Karnataka Cooperative Milk Producers’ Federation.
Dodla’s activities include procurement, processing and packaging of milk and milk products in four states and sells those in nine states. At present, it has 11 milk processing and packaging plants in Telangana, Andhra Pradesh and Karnataka.
In May last year, Rise Fund acquired the 25 per cent stake it holds in Dodla from US-based investment firm Proterra Investment Partners for $50 million. This was the first investment in India by the TPG Growth-backed fund which counts Elevar Equity and the Bridgespan Group as its other investors.