Image Credit : www.dodladairy.com
Hyderabad based Dodla dairy, an integrated dairy company is set to launch its initial public offering on June 16. The issue will conclude on June 18. Following, Shyam Metalics and Sona Comstar, it is the third main-board company to initiate IPO in the coming week. The company has placed the issue price band at Rs. 421- 428 per share in negotiations with the merchant bankers.
The public offer set forth a fresh issue up to Rs. 50 crore and an offer for sale of up to 1,09,85,444 equity shares by promoters and investors. The offer for sale comprises 92 lakh equity shares by investors TPG Dodla dairy holdings, 4,16,604 equity shares by Dodla Sunil Reddy, 10,41,509 equity shares by Dodla Family Trust and 3,27,331 equity shares by Dodla Deepa Reddy . Dodla Family Trust, Dodla Deepa Reddy, Dodla Sunil Reddy belong to the promoter group.
Investors will be able to bid for a minimum 35 equity shares and thereafter in multiples of 35 equity. For Capital expenditure requirement of Rs. 7.15 crore and repaying debt of Rs. 32.26 availed from ICICI Bank, Hongkong and Shanghai Banking Corporation (HSBC) and HDFC Bank, the company will utilize fresh issue proceeds.
The company had a total outstanding indebtedness of around Rs. 87.37 crore consisting of term loans, working capital facilities and NCD’s as of 31st December 2020.
Among the total issue size, 50 per cent has been reserved for qualified institutional buyers, 35 per cent for retail and the remaining 15 per cent for the non- institutional investors.
The company is deriving all its revenue for FY20 and for the nine months period that concluded in December 2020 from the sale of milk and dairy based value added products (VAPs) in the branded consumer market.
In Southern part of India, among the private dairy players, Dodla dairy claims to be in the third highest in terms of milk procurement per day with an average procurement of 1.03 million litres of raw milk per day considering till March 31,2021. It is second highest in terms of market presence across India among the private dairy players.
In India, it primarily operates in the states of Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra with brands that include Dodla Dairy, Dodla and KC+. In International boundaries it provide services in Uganda and Kenya with brands Dodla Dairy, Dairy Top and Dodla+. The sale of milk and dairy based VAPs constituted 72.81 per cent and 27.18 per cent of revenue in FY20, respectively.
In February 2021, TPG-backed Dodla Dairy had refiled its draft red herring prospectus. Earlier, in 2018 it had filed IPO papers to bring up around Rs. 500 crore and received SEBI nod but deferred listing plans. ICICI Securities and Axis Capital are the book running lead managers in the issue.