Milky Mist looks at ₹20,000 crore IPO to take on Amul and expand to North India

South Indian dairy product giant Milky Mist may launch a ₹20,000 crore initial public offering (IPO), Moneycontrol reported citing four sources, including the founder. HT couldn’t independently verify the information. Milky Mist is launching the IPO to expand its dairy product portfolio and take on national rival Amul by growing its presence in North, West, and other regions in India, the report read.

Why is Milky Mist launching an IPO?

This comes after Milky Mist’s discussions with investment firm WestBridge, which manages around $8 billion in assets fell through.

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The investment in Milky Mist was to be about ₹800 crore, valuing it at about ₹7,000 crore, according to an Economic Times report which added that Westbridge is also invested in companies like Indigo Airlines, Dr Lal Pathlabs, Vini Cosmetics which makes Fogg deodorant, Five Star Finance, and also startups like Rapido, PhysicsWallah, Lead School, Vedantu, and LeadSquared.

What is the story of Milky Mist?

Milky Mist, based in Erode in Tamil Nadu, started off as a milk trading company in 1985, founded by T Sathish Kumar who was a school dropout. The company started producing paneer in 1994, and eventually adding a number of products to its portfolio like curd, butter, cheese, yogurt and ice cream.

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Milky Mist is currently run by Kumar, his wife Anitha Sathish Kumar and CEO K Rathnam, who was previously the MD at Amul Dairy.

How does Milky Mist get funding at present?

Milky Mist came close to raising private capital at least three times in the last decade, but backed off due to the promoter's reluctance to give up control, as well as having valuation concerns, according to the Moneycontrol report which added that the company therefore relied on bank loans from banks including Bank of Maharashtra, Indian Overseas Bank, Union Bank, RBL and others for funding, once getting a ₹450 crore loan, interest rates subversions of up to 3%.

What are Milky Mist’s financials like?

The company generated a revenue of ₹1,950 crore and a profit of ₹50 crore in the financial year 2023-24.

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The revenue was a 35.7% increase from the previous year’s ₹1,437 crore and profit was an increase of 78.57% from ₹28 crore in 2023-24, according to the report, which cited data from private markets data provider Tracxn.