Dodla Dairy eyes Rs 520-crore IPO

The IPO offer comprises a fresh issue of up to Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by promoters and investors.

Hyderabad: Hyderabad-based Dodla Dairy will hit the capital markets on June 16 and has set its price band at Rs 421-428 per share for a Rs 520 crore initial public offer (IPO). The issue will close on June 18.

The IPO offer comprises a fresh issue of 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 consists of 92 lakh equity shares by investor TPG Dodla Dairy Holdings, and 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.

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The funds raised through the IPO will be utilised for repaying debts of Rs 32.26 crore availed from ICICI Bank, the Hongkong and Shanghai Banking Corporation (HSBC) and HDFC Bank, and for capital expenditure requirements of around Rs 7.15 crore. As of December 31, 2020, the company had a debt of Rs 87.37 crore comprising term loans, working capital facilities and NCDs.

“The cost of production went up following the pandemic leading to around Rs 200 crore or 10 per cent loss of topline. We expect to retain the status quo similar to the previous financial year in FY22. The company will continue to target a growth of 15-20 per cent going forward,’ Dodla Dairy MD Sunil Reddy said.

In terms of inorganic growth, he said the company will consider acquisition if it gets a good value and opportunity in the existing market. “We will expand our presence in coastal Karnataka, Telangana and Tamil Nadu. We can go for Rs 200-300 crore size acquisitions. We will look at value while finalising acquisition candidates. In the next couple of years- we may look at 1-2 acquisitions. We have recently set up new plants in Hyderabad and Rajahmundry. We are looking at brownfield expansion,” he added.

Dodla Dairy is present across five states including Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra, operating under brands like Dodla Dairy, Dodla and KC+. Currently, it has 370 outlets and is planning to add a couple of hundreds this year.

The company has an overseas presence in Africa with brands Dodla Dairy, Dairy Top and Dodla+ and is keen to strengthen its market there. Sunil Reddy added, “We will improve our African operations. We are procuring, processing and distributing in Africa. We may look at markets where there are significant margins.”

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