Parag Milk Foods Private Limited’s search for an investor ended with IDFC PE all set to invest in the company. The investment is the largest PE infusion in the country’s dairy sector. These funds will be utilised to build capacities in various product lines and to strengthen its procurement infrastructure.
IDFC will invest around R155 Cr for approx. 15-20% stake in the company through CCDs. Existing investor Motilal Oswal PE will be diluting its stake. Motilal had invested R55 Cr in Parag Milk in 2008 for 10-12% stake.
Edelweiss was the I-bank to the transaction.
Post the transaction, promoters will hold around 60% stake and 35% stake will be held by two PE funds together.
This is the second investment for the infrastructure focused PE firm in the 'rural infrastructure', with the first being in Star Agri.
Parag Milk had shelved its plan to raise funds through IPO last year due to subdued stock market conditions and announced plans to rope in a private investor in February this year.
This year few dairy players were planning to take on board private investors for supporting their expansion plans. Among them is Kwality Dairy which was looking to raise around R570 Cr from PE funds and Prabhat Dairy was in talks with IDFC and Abraaj Capital to raise up to R100 Cr.
The company's expansion plans are to come up with its own range of milkshakes and setting up of another plant in Andhra Pradesh costing around R110 Cr.
Parag Milk Foods is among the largest milk producers in the nation with a capacity to produce 1 million litres per day and holds around 2% share of the R60000 Cr organized milk and allied products market in India. It has the Gowardhan, Pride of cows and GO brands under it.
The product range of the company includes skim milk powder, ghee, processed cheese etc. and proprietary foods like dairy whitener and gulab jamun mix. It exports milk products to 27 countries in West Asia, South-East Asia and Africa with the plant located at Pune. It operates with more than 300,000 retail outlets and has more than 2,000 distributors.
Earlier this year the company announced that it has captured 50% of the R500 Cr institutional cheese market for its processed cheese brand Go Cheese.
Other players in the space that received private funds over the past 5 years include Nilgiris Dairy Farm which raised $65 Mn from Actis PE for 65% stake in 2006 and Carlyle invested $22 Mn in Tirumala Milk in 2010.
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KVEZAR VIEW
Fund |
| Name | Corpus | Target Sector | Website | KeyContact |
| IDFC Private Equity |
|
Infrastructure
Telecom
Oil & Gas |
www.idfcpe.com |
Vikram ManiarAnahita PatellShishir MaheshwariGordon D'SouzaAmit MahensariaRaja ParthasarathyRohit AnandAmit MahensariaGordon D'SouzaShishir MaheshwariAnahita PatellVikram ManiarPrakash KarnikSatish MandhanaRupa Vora
|
Company |
| Name | Promoters | Office | Competitor | Website |
| Parag Milk Foods Private Limited |
Devendra Prakash Shah |
Flat No.1, Plot No.19,Nav Rajasthan Soc., behind Ratna Memorial Hospital, S.B.Road, Shivaji Nagar. |
|
http://www.gowardhanindia.com |
 |
Edelweiss Alternative Asset Advisors Limited (EAAA) |
