Indian dairy company Milky Mist has taken a significant step toward its initial public offering (IPO) by appointing two independent directors, Radha Venkatakrishnan and Mallika S Janakiraman, to its board. This move, detailed in regulatory filings, ensures compliance with the Companies Actâs independence requirements as the company prepares to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The appointments reflect Milky Mistâs commitment to robust corporate governance as it transitions to a publicly listed entity.
IPO Plans and Valuation
Milky Mist is gearing up to raise between Rs 1,500 crore and Rs 2,000 crore through its IPO, with an estimated valuation of Rs 20,000 crore, according to reports from Business Standard. The IPO, expected to include a mix of fresh issues and offers for sale, will be managed by prominent financial institutions, including JM Financial, IIFL Capital, and Axis Bank. This public listing will position Milky Mist alongside other listed dairy companies such as Hatsun Agro Product, Heritage Foods, Parag Milk Foods, and Dodla Dairy, while also intensifying competition with unlisted giants like Amul.
Company Background
Founded in 1985 by T. Sathish Kumar as a milk trading company, Milky Mist evolved into a major player in the dairy industry by focusing on value-added products. The company began producing paneer in 1994 and has since expanded its portfolio to include cheese, curd, yogurt, butter, ghee, and frozen desserts. Headquartered in Perundurai, Tamil Nadu, Milky Mist operates a fully automated 75-acre facility capable of processing 1.5 million litres of milk daily. Its direct farm-to-fork model ensures quality control by sourcing milk directly from farmers and processing it in-house.
Milky Mist serves a diverse customer base, including modern trade (supermarkets and hypermarkets), quick commerce platforms, and the hospitality, retail, and catering (HoReCa) segments. Its emphasis on premium, value-added products distinguishes it in a market where traditional milk sales account for two-thirds of the dairy industry, as noted in an analysis by The Ken.
Financial Performance
For the fiscal year ending March 2024 (FY24), Milky Mist reported a robust 33% year-on-year revenue growth, reaching Rs 1,940 crore, as confirmed by Wikipedia and Business Standard. The companyâs profit for the same period was Rs 50 crore, a significant figure that reflects its strong market position despite earlier reports suggesting a profit of Rs 19.46 crore. This discrepancy may stem from outdated or preliminary data, but the higher profit aligns with Milky Mistâs growth trajectory and investments in expansion.
The companyâs financial success is driven by its focus on high-margin products like paneer and cheese, which contribute significantly to its revenue. For instance, cheese accounts for 30% of its turnover, followed by paneer at 27% and curd at 25%, according to The Weekend Leader. Milky Mistâs revenue growth also reflects the broader trend in Indiaâs dairy industry, where the value-added segment is growing at 15-20% annually, as highlighted in Business of Food.
|
Financial Metric |
FY23 |
FY24 |
|---|---|---|
|
Revenue (Rs Cr) |
1,429 | 1,940 |
|
Profit (Rs Cr) |
28 | 50 |
Note: FY23 revenue is estimated based on 33% growth from FY24.
Strategic Growth Initiatives
Milky Mistâs business model sets it apart from traditional dairy companies that rely heavily on milk sales. By focusing on value-added products, the company achieves higher profit margins, positioning it as a formidable competitor to industry leader Amul, as detailed in YourStory. To support its growth, Milky Mist has invested in advanced manufacturing capabilities, including the acquisition of three SIG filling machinesâSIG SmileSmall 24 Aseptic, SIG Midi 12 Aseptic, and SIG XSlim 12 Asepticâin 2023, as announced on LinkedIn. These machines enhance production efficiency and ensure product quality for up to 12 months.
The company is also expanding its manufacturing footprint. In 2022, it launched a direct-to-consumer (D2C) e-commerce platform and mobile app, and it is currently developing Indiaâs largest single-location cheese-making unit in Perundurai with an investment of Rs 450 crore, according to Wikipedia. These initiatives are part of Milky Mistâs broader strategy to expand beyond southern India into markets like Maharashtra, Gujarat, Rajasthan, Madhya Pradesh, and Delhi-NCR.
Sustainability Efforts
Milky Mist is committed to environmental sustainability, aligning with global trends toward responsible business practices. The company has installed a 4.0 MW solar photovoltaic (SPV) power plant to power its factories, reducing carbon dioxide emissions by 4,340 tons annually and saving 1,99,306 trees each year, as outlined on its official website. These efforts not only lower the companyâs environmental footprint but also enhance its appeal to socially conscious investors as it approaches its IPO.
Corporate Governance and Industry Trends
The appointment of independent directors is a critical step in strengthening Milky Mistâs corporate governance framework, a requirement for companies seeking to go public in India. This practice is common among firms preparing for IPOs, as seen with other companies like Zepto, Physics Wallah, and Shadowfax, which have also appointed independent directors to meet SEBIâs regulatory standards. While specific details about Radha Venkatakrishnan and Mallika S Janakiramanâs backgrounds are not widely available, their roles are expected to bring diverse perspectives and oversight to the board.
Indiaâs dairy industry is experiencing steady growth, particularly in the value-added segment, which is expanding at 15-20% annually, according to Business of Food. Milky Mistâs focus on premium products, combined with its operational efficiency and sustainability initiatives, positions it to capitalize on this trend. The companyâs IPO is expected to provide the capital needed to scale its operations and compete more effectively with both listed and unlisted players in the market.
Future Outlook
As Milky Mist prepares for its IPO, it is well-positioned to leverage its strong financial performance, innovative product portfolio, and commitment to sustainability to attract investors. The IPO proceeds will support the companyâs ambitious expansion plans, enabling it to penetrate new markets and strengthen its national presence. By continuing to invest in technology, sustainability, and governance, Milky Mist is poised to become a leading player in Indiaâs dairy industry, challenging established brands and driving growth in the value-added segment.
Conclusion
Milky Mistâs journey from a small milk trading company to a Rs 20,000 crore valuation is a testament to its strategic vision and resilience. With its upcoming IPO, the company is set to make a significant impact on Indiaâs dairy industry, offering investors and consumers a compelling story of innovation, sustainability, and growth. As it navigates the complexities of going public, Milky Mistâs focus on quality, efficiency, and environmental responsibility will be key to its long-term success.
