About the Company:
Dodla Dairy Ltd is an integrated dairy company based in south India primarily deriving revenue from the sale of milk and dairy based VAPs in the branded consumer market.
Amongst private dairy players with a significant presence in the southern region of India, Dodla dairy is the third highest in terms of milk procurement per day with an average procurement of 1.02 million litres of raw milk per day (“MLPD”) as of December 31, 2020.
Company processes and sell retail milk (full cream, standardised, toned and double toned) and produce dairy based value added products (“VAPs”) such as curd, Ultra-High Temperature processed (“UHT”) milk, ghee, butter, flavoured milk and ice cream amongst others.
Company also manufactures and sells cattle feed to farmers through our procurement network.
Company’s operations in India are primarily across the five Indian states of Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Maharashtra.
The Indian operations are undertaken under brand names “Dodla Dairy”, “Dodla” and “KC+”
Company’s Overseas Operations:
Dodla Dairy’s overseas operations are based in Uganda and Kenya and overseas operations are undertaken under brand names “Dodla Dairy”, “Dairy Top” and “Dodla+”.
Company’s Average Milk Procurement:
Dodla dairy’s milk procurement operations are spread across the states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Maharashtra.
These consist of an average procurement of 1.02 MLPD as of December 31, 2020 from approximately 114,920 farmers through 6,624 Village Level Collection Centres (“VLCCs”), 254 dairy farms and third party suppliers as of December 31, 2020.
Company’s Processing plants.
Company’s processing operations are spread across 13 processing plants (12 of which are owned and one is leased) located in the states of Andhra Pradesh, Telangana, Karnataka and Tamil Nadu in India with an aggregate installed capacity of 1.70 MLPD.
company also has two SMP (skimmed milk powder) plants in Nellore and Vedasandur which have an aggregate installed capacity of 15,000 and 10,000 kgs per day respectively.
Company’s Distribution Network:
Dodla dairy’s distribution and marketing operations consist of distribution of milk and dairy based VAPs through 40 sales offices, 3,336 distribution agents, 863 milk distributors and 449 milk product distributors across 11 states in India.
Additionally, company’s milk and dairy based VAPs are also available through 371 “Dodla Retail Parlours” which commenced operations in 2016 and are spread across the states of Andhra Pradesh, Telangana, Tamil Nadu and Karnataka.
Financial comparison of South based dairy companies (FY 2020):
Company’s Cattle feed business:
In Fiscal 2019 company acquired a cattle feed and mixing plant with a capacity of 80 MTPD in Andhra Pradesh for the purpose of manufacturing and selling cattle feed to farmers through company’s procurement network.
Company has successfully integrated the cattle feed operations with our existing procurement network through our subsidiary OPL.
company supplies cattle feed under the “Orga” brand, manufactured by our Subsidiary Orgafeed Pvt Ltd, directly to our farmers through company’s procurement network.
Percentage wise revenue from Milk & Value Added Products (VAPs):
Company’s revenue from sale of milk and dairy based VAPs constituted 72.81% and 27.18% respectively, of our revenue in Fiscal 2020 and 74.45% and 25.55% respectively, for the six months period ended September 30, 2020.
Company’s African Business:
Dodla Dairy commenced overseas operations in Fiscal 2015 through the acquisition of the operations of Hillside Dairy and Agriculture Limited through our Subsidiary Lakeside Dairy Ltd in Africa.
Packaged milk and dairy based VAPs for retail are produced from our processing plant in Uganda and are distributed in Uganda and Kenya.
Distribution of milk and dairy based VAPs in Uganda are done through 22 distributors and 18 “Dodla Retail Parlours”.
Distribution in Kenya is done through 57 distribution agents and 53 distributors.
Management Team:
- Mr. Dodla Sesha Reddy (Designation: Chairman and Non- Executive Director)
- Mr. Dodla Sunil Reddy (Designation: Managing Director)
Objectives of the Issue:
Offer for Sale: (Rs. 470 cr)
- The proceeds of the Offer for Sale shall be received by the Selling Shareholders. Company will not receive any proceeds from the Offer for Sale and the proceeds received from the Offer.
Fresh Issue: (Rs. 50 cr )
- Repayment and/ or pre-payment, in full or part, of certain borrowings availed by the Company.
- Funding capital expenditure requirements of the Company.
- General corporate purposes.
Positives for the Company:
Consumer focused dairy company with a diverse range of products under the “Dodla Dairy” and “Dodla” brands.
- Dodla Dairy is one of the leading brands in the dairy products industry in south India with strong consumer recognition, particularly in the States of Andhra Pradesh, Karnataka, Tamil Nadu and Telangana.
- Company sells UHT milk, flavoured milk, ice cream and beverages such as buttermilk under Dodla dairy brand, primarily for direct consumption.
- Company also sells fresh milk, ghee, butter, curd, paneer, gulab jamun, doodh peda, basundhi and junnu, which is targeted at consumption at home.
Integrated business model with well-defined procurement, processing and distribution capabilities.
- Company’s procurement operations are spread across the states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Maharashtra and consist of an average procurement of approximately 1.02 MLPD of raw milk.
- Milk is collected from approximately 114,920 farmers across 6,878 villages through 6,624 VLCCs, more than 272 milk procurement routes, 254 dairy farms and 90 chilling centres as of December 31, 2020.
Financials of the Company: (Consolidated)
| (in Crores) | FY 16 | FY 17 | FY 18 | FY 19 | FY 20 | 31st Dec 20 |
|---|---|---|---|---|---|---|
| Revenue | 1206.9 | 1447.37 | 1597.01 | 1699.4 | 2145.6 | 1417.0 |
| Net Profit | 52.83 | 46.53 | 54.33 | 65.0 | 54.8 | 116.3 |
Valuation of Peer Group Companies:
| Company Name | Face Value | EPS | PE Ratio | Market Cap |
|---|---|---|---|---|
| Dodla Dairy Ltd | 10 | 8.96 | 47.76 | 2546 cr |
| Hatsun Agro Products Ltd | 1 | 6.94 | 123.5 | 20000 cr |
| Heritage Foods Ltd | 5 | (34.55) | NA | 1183 cr |
| Parag Milk Foods Ltd | 10 | 11.14 | 12.50 | 712 cr |
| Umang Dairy Ltd | 5 | 3.24 | 19.13 | 178 cr |
| Tasty Dairy Ltd | 10 | 2.86 | 11.5 | 68 cr |
IPO Details:
| Details | Info |
|---|---|
| Issue Opens on | 16th June 2021 |
| Issue Closes on:. | 18th June 2021 |
| Issue Price | Rs.421 – 428 |
| Face Value | Rs.10 |
| Minimum Lot | 35 shares |
| Minimum Investment | Rs.14,980 |
| Issue Constitutes | 20.42% |
| Issue Size | Rs.520 cr ($70 million) |
| Market Cap | Rs. 2546 cr ($344 million) |
| Listing at | NSE & BSE |
| Equity Shares Offered (Fresh) | 11,68,224 |
| Equity Shares Offered (OFS) | 1,09,85,444 |
| Total Equity Shares Offered (fresh+ OFS) | 1,21,53,668 |
| Equity Shares Prior to the Issue | 5,83,24,511 |
| Equity Shares after the issue | 5,94,92735 |
Also Read : List of Upcoming IPO’s in India.
Important Dates:
| Finalization of Basis of Allotment | On or Before 23rd June 2021 |
| Initiation of Refunds | On or Before 24th June 2021 |
| Credit of Equity Shares: | On or Before 25th June 2021 |
| Listing Date: | On or Before 28th June 2021 |
Subscription Details: (Will be Updated)
| (Subscription-Category-Wise (no. of times) Till time : 06:00 PM) | Shares Offered | Day-1 | Day-2 | Day-3 |
|---|---|---|---|---|
| QIB | 24,30,734 | 0.02 | 0.28 | 84.88 |
| NII | 18,23,051 | 0.14 | 0.60 | 73.26 |
| Retail | 42,53,784 | 2.73 | 6.18 | 11.34 |
| Employee | ———- | — | — | — |
| TOTAL | 85,07,569 | 1.40 | 3.30 | 45.62 |
IPO Valuation Parameters:
| Earnings Per Share (EPS) | Price To Earnings ratio (PE) | Return on Net Worth (RoNW) | Net Asset Value (NAV) |
|---|---|---|---|
| 8.96 | 47.76 | 11.50% | 97.74 |
| Check IPO Allotment Status: |
|---|
KfinTech Website: http://kfintech/IPO/Allotment_StatusBSE IPO Website: https://www.bseindia.com/IPO/Allotment |
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| Company Contact Info: |
|---|
| Dodla Dairy Limited 8-2-293/82/A/270-Q, Road No 10-C Jubilee Hills, Hyderabad, 500 033 Telangana, India Tel: +91 40 4546 7777 Fax: +91 40 4546 7788 E-mail: mail@dodladairy.com Website: www.dodladairy.com |
Also Read: Some Interesting facts about Amul Dairy
| IPO Registrar Info: |
|---|
| KFin Technologies Private Limited Selenium, Tower B, Plot No- 31 and 32, Financial District, Nanakramguda, Serilingampally Hyderabad, Rangareedi 500 032 Telangana, India Tel: +91 40 6716 2222/ 180034 54001 E-mail: dodladairy.ipo@kfintech.com Website: www.kfintech.com |
