It will be an action-packed week ahead for the primary market as Hyderabad-based Dodla Dairy Limited gets set to launch its Rs 520-crore initial public offering (IPO) on June 16. The IPO will close on June 18 and the price band is between Rs 421 and Rs 428 per share. The dairy company’s IPO marks the third company to announce the launch of its IPO this week, on the back of Shyam Metalics and Sona Comstar.
After a dry spell in the primary market through the months of April and May, at least five firms will open their IPOs in the next week, including Shyam Metalics, Navoday Enterprises and Sona Comstar (June 14), KIMS Hospitals and Dodla Dairy (June 16).
The Dodla Dairy Limited IPO will include a Rs 50-crore fresh issue and an offer for sale (OFS) of over 1.09 equity shares. The OFS by TPG Dodla Dairy Holdings, the investor, will consist of 92 lakh equity shares, while the remaining will be by the promoter group. Investors for the IPO can bid for a base of 35 shares followed by multiples of 35 thereon. Retail individual investors may apply for up to 13 lots which amounts to 455 shares.
While half the issue size has been reserved for qualified institutional buyers (QIBs), 15 per cent has been reserved for non-institutional investors and 35 per cent for retail investors.
Dodla Dairy had filed its draft red herring prospectus (DRHP) for the IPO in February 2021. The company plans to use the proceeds of the IPO towards prepayment or repayment of some borrowings, apart from funding capex needs.
The dairy company had filed its papers back in 2018 as well in a bid to raise nearly Rs 500 crore and had received the go-ahead from market regulator SEBI but it had put off its plans to get listed back then.
In terms of financials, as of March 31, the company’s total outstanding debt stood at a little over Rs 87 crore, according to the draft papers filed by the company. Its revenues grew at 15.98 per cent CAGR from financial year 2018 to 2020 to touch Rs 2,139.37 crore. The revenue from milk and dairy sales contributed to 72.81 per cent of its overall revenues for fiscal year 2020. The other portion, ie, 27.18 per cent, came from sales of value-added product category. In fiscal year 2021, the first nine months saw the value-added products (VAPs) bring in 24.68 per cent of the revenues while milk products brought in 75.32 per cent of total revenues. The EBITDA of the company rose between FY2018 and FY2020 at 11.81 pc CAGR to stand at Rs 140.9 crore. The company said its return on equity (ROE) for fiscal year 2020 was at 11.5 per cent.
Dodla Dairy claims to be the third biggest dairy in terms of procurement of milk in southern India. The dairy produces 1.03 million litres of milk every day, as of the end of the fiscal year 2021. The processing of milk and VAPs is done at 13 plants which have an overall installed capacity of 1.70 MLPD.
It was incorporated in 1995 with production starting in 1997. Its products are available via 371 retail parlours that began operations in 2016 across Telangana, Andhra Pradesh, Karnataka and Tamil Nadu. Its key market segments are these five southern states and Maharashtra in the domestic market while on the global front, it also has operations in Kenya and Uganda. The company’s distribution network is spread across 11 states, with more than 3336 distribution agents, 863 milk distributors and 449 product distributors. Among the products that Dodla Dairy sells apart from milk are curd, butter, ice cream and ghee.
Following the listing, Dodla Dairy will join its competitors in the sector that have been listed including Heritage Foods, Hatsun Agro Products and Parag Milk Foods.
India is the world’s largest producer of milk, producing in the range of 188 million MT in 2019-2020. Private dairy players make up for over 60 per cent of India’s dairy processing capacity. The dairy industry in the country has grown nearly 12 per cent over the last five years, with the VAP category being a key driver of growth. Dairy is also the single largest agri commodity with a nearly 4 per cent market share of the economy.
Here are some of the important dates to be kept in mind while applying for the Dodla Dairy Limited IPO.
|IPO Open Date
|June 16, 2021
|IPO Close Date
|June 18, 2021
|Basis Of Allotment Date
|June 23, 2021
|Initiation Of Refunds
|June 24, 2021
|Credit Of Shares To Demat Account
|June 25, 2021
|IPO Listing Date
|June 28, 2021
Private dairy player based out of Hyderabad, Dodla Dairy, will hit the primary market on June 16 with an IPO of Rs 520 crore. The IPO consists of fresh issue of shares worth Rs 50 core and will be sold in the price band of Rs 421 and Rs 428. If you are interested in the Dodla Dairy IPO, log in to your Angel One demat or IPO account and look up all the details. If you are a new investor, open a demat/IPO account to begin your investment journey.
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