Hyderabad-based Dodla Dairy is planning to 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 total issue size of the company’s IPO is Rs 520 crore. The issue will close on June 18.
Dodla Dairy 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.
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 total 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 Managing Director Sunil Reddy told reporters at a virtual press conference. He said the company will also consider acquisition if it gets a good value and opportunity in the existing market.
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, the company has 370 outlets and is planning to add a couple of 100 more this year, he said.
The company also has overseas presence in African countries including Uganda and Kenya with brands Dodla Dairy, Dairy Top and Dodla+. Sale of milk and dairy-based value added products (VAPs) of the company constituted 72.81 per cent and 27.18 per cent, respectively, of the revenue in FY20.