Dodla Dairy IPO Review: The year 2021 was off to a great start and now we’re back with at least 4 awaited IPOs coming in this week. These also include the Dodla Dairy.
In this article, we cover the Dodla Dairy IPO Review. Here, we’ll look into important information on the IPO and find out the possible prospects of the company.
Table of Contents
Dodla Dairy Ltd IPO – About the Company
Founded in 1995, Dodla Dairy Limited commenced its operation in 1997 at Hyderabad. Dodla Dairy is an integrated dairy company engaged in the procurement, processing, distribution, and marketing of milk and other dairy products.
Their product portfolio consists of Milk, Butter, Ghee, Paneer, Curd, Flavoured Milk, Doodh Peda, Ice Cream, and Milk Based Sweets. These products are conveniently packed to suit the various needs of its consumers. Their products are available for purchase in 10 states.
The company has 13 processing plants to process raw material into packaged milk and manufacture dairy-based value-added products. Their procurement is centered in 4 states Andhra Pradesh, Telangana, Tamil Nadu, and Karnataka.
When it comes to procuring the company is the third-largest dairy in India in terms of milk procurement with an average procurement of 1.00 million liters of raw milk per day as of May 31, 2018 (“MLPD”) and second highest in terms of market presence amongst private dairies.
The company also uses this network to manufacture and sell cattle feed to farmers through its procurement network.
The company has 86 milk chilling centers. They also have a strong distribution network of 40 sales offices, 3336 distribution agents, 863 milk distributors, and 449 product distributors across 11 states in India. Their key markets in India are Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and Maharashtra.
Dodla sells products in the domestic market under brands such as Dodla Dairy, Dodla, and KC+. The company also exports its products to Uganda and Kenya. It sells products overseas under brands Dodla Dairy, Dairy Top, and “Dodla+.
Like many other companies, Dodla Dairy too was faced the negative effects of Covid in its business. The company experienced a 20% drop in volumes and a 12% drop in sales for 4 quarters till the end of 2020.
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Competitors of Dolda Dairy
Dodla Dairy Ltd – Key IPO Information
The promoters of the company include Dodla Sunil Reddy, Dodla Family Trust, and Dodla Deepa Reddy.
| Particular | Details |
|---|---|
| IPO Size | ₹520.18 Cr |
| Fresh Issue | ₹50.00 Cr |
| Offer For Sale(OFS) | ₹470.18 Cr |
| Opening Date | Jun 16, 2021 |
| Closing Date | Jun 18, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹421 to ₹428 per equity share |
| Lot Size | 35 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Jun 28, 2021 |
The company has appointed ICICI Securities and Axis Capital as boo running lead managers to the issue. KFintech Pvt. Ltd. has been appointed as the registrar to the issue.
Dodla Dairy IPO Review – Grey Market Premium
The shares of Dodla Diary traded at a grey market premium of 18-20%. The IPO price band is set at Rs. 421 to Rs. 428 while the shares traded at a premium of Rs. 75-80.
Purpose of the Dollda Dairy IPO
The funds raised from the IPO will be used for the following purposes.
- Repayment/pre-payment, in full or part, of certain borrowings availed by the Company. This will be directed towards 32.6 crores raised from ICICI Bank, The Hongkong and Shanghai Banking Corporation (HSBC), and HDFC Bank. The total debt of the company stood at Rs. 87.37 crore as of December 2020.
- Purchase of equipment. The company plans to use Rs. 7.15 crore towards capital expenditure.
- General corporate purposes
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Closing Thoughts
The IPO opens on 16th June and closes on 18th June 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Dodla Dairy Ltd.
That’s all for this post. Do let us know what you think of the Dodla Dairy Ltd. IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!
Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
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