Dodla Dairy will enter Dalal Street next week to raise Rs 520 crore through an initial public offering (IPO), comprising of a fresh issue of equity shares and an offer for sale by existing shareholders. The IPO is set to open on June 16 and will close on June 18. Investors can bid for shares of Dodla Dairy Limited at the fixed price band of Rs 421-428 per share, in a bid lot of 35 shares and multiples thereafter. The company had filed draft papers with SEBI earlier this year and had received approval from the capital markets regulator to float its public offering in the last week of April.
The issue of Dodla Dairy consists of a fresh issue of equity shares worth Rs 50 crore and an offer for sale (OFS) of up to 1.09 crore equity shares of face value Rs 10 each. The selling shareholders include promoters Dodla Sunil Reddy and Dodla Deepa Reddy, along with TPG Dodla Dairy Holdings. Post issue, promoter shareholding in the company will drop to 64.17% from the current 68.52%. Public shareholding in Dodla Dairy will improve to 35.83% from 31.48% pre-issue. The number of shares of Dodla Dairy will increase to 5.95 crore.
50% of the issue or approximately 60.76 lakh equity shares on offer have been reserved for qualified institutional buyers (QIB). Non-Institutional Investors (NII) can bid for 18.23 lakh equity shares or 15% of the total issue. Retail investors are eligible for 35% of the total issue or 42.53 lakh equity shares. Dodla Dairy plans to use the funds raise via the fresh issue to re-pay or pre-pay debt availed by the company. Part of the funds will also be utilised towards incremental capital expenditure requirements.
Dodla Dairy is an integrated dairy company based in south India. The primary source of revenue for the company is from the sale of milk and dairy-based Value Added Products in the branded consumer market. The company sell fresh milk, ghee, butter, curd, paneer, among other dairy products, which are targeted at consumption at home. They sell UHT milk, flavoured milk, ice cream and beverages such as buttermilk under their brand, primarily for direct consumption, according to Axis Capital. The company has continued to remain profitable for the last three fiscal years.