Dodla Dairy IPO: Opens today; Key details an investor should know before investing

The Initial Public Offering (IPO) of the south India-based Dodal Dairy is scheduled to open for subscription today, i.e. on June 16, 2021. The integrated dairy company seeks to raise Rs 520 crore from the primary market.

The offer comprises a fresh issue of Rs 50 crore and an offer for sale of over 1.09 crore equity shares by TPG Dodla Dairy Holdings Pte Ltd and promoter selling shareholders.

The price band for the public issue has been fixed at Rs 421-428 per equity share. Investors can bid for a lot of 35 shares and in multiples thereafter. The public issue will open for subscription on Wednesday till June 18, 2021. In the offer, 35 per cent of the issue is reserved for retail investors, 50 per cent for qualified institutional buyers (QIBs), and the rest 15 per cent for non-institutional investors.

Dodla Dairy will use the proceeds of the fresh issue for repaying the debt of Rs 32.26 crore availed from various banks and for capital expenditure requirements of Rs 7.15 crore.

ICICI Securities and Axis Capital are the book running lead managers to the offer. The equity shares issued by the company will be listed on both BSE and the National Stock Exchange.

Competitive Strengths

Consumer-focused dairy company with a diverse range of products under the "Dodla Dairy" and "Dodla" brands

An integrated business model with well-defined procurement, processing and distribution capabilities

Focused engagement and long term relationship with dairy farmers

Stringent quality control procedures

Dodla Dairy Limited is an integrated dairy company based in South India primarily deriving revenue from the sale of milk (72.81 per cent in FY20) and dairy-based VAPs (Value Added Products) (27.18 per cent in FY20) in the branded consumer market. The company processes and sells retail milk (full cream, standardised, toned among others) and produces dairy-based VAPs such as curd, Ultra - High Temperature processed ("UHT") milk, ghee etc. Its operations in India are primarily across the states of Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra whereas its overseas operations are based in Uganda and Kenya.

It has 13 processing plants with an aggregate installed capacity of 1.70 MLPD. Its revenue from operations increased at a CAGR of 15.98 per cent over Fiscal 2018 to Fiscal 2020 and amounted to Rs 21,393.73 million in FY 2020.