Dodla Dairy will enter Dalal Street next week to raise Rs 520 crore through an initial public offering (IPO), comprising a new issue of shares and an offer to sell by existing shareholders. The IPO is scheduled to open on June 16 and end on June 18. Investors can bid for Dodla Dairy Limited shares at the fixed price range of Rs 421 to Rs 428 per share, in a batch of 35 shares and multiples thereafter. The company had filed draft documents with SEBI earlier this year and received approval from the capital markets regulator to launch its public offering in the last week of April.
The issue of Dodla Dairy consists of a new issue of shares with a value of Rs 50 crore and an offer to sell (OFS) of a maximum of 1.09 crore of shares with a par value of Rs 10 each. The selling shareholders are the promoters Dodla Sunil Reddy and Dodla Deepa Reddy, as well as TPG Dodla Dairy Holdings. After the issuance, the promoters’ stake in the company will increase to 64.17% from the current 68.52%. The public stake in Dodla Dairy will improve to 35.83% from 31.48% before the issue. The number of Dodla Dairy shares will increase to 5.95 crore.
50% of the issue or approximately 60.76 lakh shares offered has been reserved for Qualified Institutional Buyers (QIB). Non-Institutional Investors (NII) can bid for 18.23 lakh capital shares or 15% of the total issue. Retail investors are eligible for 35% of the total issue or 42.53 lakh capital shares. Dodla Dairy plans to use the funds raised through the new issue to repay or prepay the debt incurred by the company. Part of the funds will also be used to cover additional capital expenditure needs.
Dodla Dairy is an integrated dairy company based in South India. The main source of revenue for the company comes from the sale of value-added milk and dairy products to the branded consumer market. The company sells fresh milk, ghee, butter, curds, paneer, among other dairy products, for home consumption. They sell UHT milk, flavored milk, ice cream and drinks such as buttermilk under their brand, primarily for direct consumption, according to Axis Capital. The business has continued to be profitable over the past three years.