Parag Milk Foods files DRHP with SEBI

Milk and dairy products company Parag Milk Foods Private Limited has filed a draft red herring prospectus (DHRP) with the Securities Exchange Board of India (SEBI). The issue comprises of a fresh issue and an offer for sale (OFS) by the selling shareholders. Fresh issue of shares worth INR3.25 billion and an offer for sale (OFS) of 19.85 million equity shares are being proposed. The IPO’s pricing will be disclosed later.

Kotak Mahindra Capital Company, JM Financial Institutional Securities, IDFC Securities and Motilal Oswal Investment Advisors will manage the issue as its book running lead managers. Devendra Shah, Pritam Shah and Parag Shah are promoters of Parag Milk Foods.

The purpose of the issue is to meet capital expenditure and modernization of its existing manufacturing facilities in Manchar facility and the Palamaner facility, along with improving its distribution and marketing infrastructure. Some of the will also be directed towards financing the capital expenditure requirements for expansion and modernization of its subsidiary, Bhagyalaxmi Dairy Farm. Other requirements include partial repayment of working capital loans and for general corporate purposes.

Parag Foods Milk

Around INR1.47 billion will be routed for expansion and modernization, while INR23.2 million have been earmarked for financing capital expenditure requirements of Bhagyalaxmi Dairy Farm. Nearly INR1 billion will be used for partial repayment of the working capital consortium loan.

Read Also: Narayan Hrudayalaya files prospectus for IPO

IDFC to part-exit Parag Milk Foods 

The IPO will also offer an exit route to IDFC Private Equity and India Business Excellence Fund (IBEF) which plan to sell a combined total of 13.7 million shares. Among other investors exiting the company will be Netra Shah, Priti Shah, Ladderup Finance Limited, Parvati Devi Pasari, Anmol Insurance Consultants Private Limited, Chetan Pasari and Seema Pasari, Satyanarayan Kanhaiya Lal Kabra, Seema Narayan Pasari and Narayan Ramgopal Pasari, Meet Narayan Pasari, Nipa Doshi, Placid Limited, Suneeta Agrawal, Vimla Oswal and Pratik Oswal.

Parag Milk Foods plant

Read Also: Sandhar Technologies to raise INR3 billion through IPO, files prospectus

Biggest cheese plant in Asia

The Mumbai-based company also owns the largest cheese plant in Asia with output capacity up to 1 million liters per day. Net profits of the company rose from INR6.27 million in FY 2011 to INR294.72 million in FY 2015. In the same timeframe, volume of milk procured increased from 680,000 liters per day to 1.05 million liters per day.

The company commenced operations in 1992 and has now developed into a dairy-based products company manufacturing products including cheese, whey proteins, fresh paneer (cottage cheese), milk, ghee, yoghurt, curd and milk. Parag Milk Foods sells its products through several brands including Gowardhan, Go, Pride of Cows and Topp Up.

Vipin Mathur

By working in multiple cultures and segments of various organizations, Vipin has earned 15 years of experience in managing and organizing different operations. Most recently, he is associated with IPO Central as CEO. At IPO Central, he plays a leading role in management and operational practices. He also guides authors and researchers about the latest trends and news of upcoming IPOs.

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