Executive Summary
Milky Mist presents a unique proposition in the Indian dairy sector. Unlike its peers who rely on low-margin liquid milk sales, Milky Mist derives 100% of its dairy revenue from high-margin products like Paneer, Cheese, and Yoghurt. The company has demonstrated a stellar Revenue CAGR of 29.82% between FY23 and FY25.
However, the financials show stress on the bottom line due to heavy debt servicing. The IPO is primarily a de-leveraging exercise, with ₹7,500 Million earmarked for debt repayment. This is expected to significantly boost Net Profit margins post-listing.
| Parameter | Details |
|---|---|
| Issue Size | ₹ 20,350 Million (Approx) |
| Fresh Issue | ₹ 17,850 Million |
| Offer for Sale | ₹ 2,500 Million |
| Promoters | Sathishkumar T & Anitha S |
| Lead Managers | JM Financial, Axis Capital, IIFL Capital |
Financial Performance Analysis
The company has shown robust top-line growth, but profitability has been suppressed by finance costs. Below is the restated consolidated financial data:
| Particulars (₹ Mn) | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Revenue from Operations | 13,941 | 18,216 | 23,495 |
| Revenue Growth (%) | – | 30.66% | 28.98% |
| EBITDA | 2,013 | 2,223 | 3,103 |
| EBITDA Margin (%) | 14.45% | 12.21% | 13.21% |
| Net Profit (PAT) | 272 | 194 | 460 |
| PAT Margin (%) | 1.95% | 1.07% | 1.96% |
| Total Debt | 7,980 | 10,367 | 13,763 |
Analyst View: The low PAT margin of 1.96% is deceptive. In FY25 alone, the company paid ₹1,047 Million in finance costs. The IPO proceeds will retire a large portion of this debt, potentially adding 3-4% to the Net Profit margin immediately post-listing.
Objects of the Offer
The company plans to utilize the Net Proceeds (from the Fresh Issue of ₹17,850 Mn) for:
- Repayment of Borrowings: ₹ 7,500.00 Million.
- Capex (Perundurai Facility Expansion): ₹ 4,147.15 Million.
- Deployment of Visi-coolers/Freezers: ₹ 1,294.28 Million.
- General Corporate Purposes.
Peer Comparison
Milky Mist competes with both cooperatives (Amul, Nandini) and private listed players. Here is how they stack up financially:
| Company | Revenue (₹ Mn) | RoNW (%) | P/E Ratio |
|---|---|---|---|
| Milky Mist | 23,495 | 18.98% | NA |
| Hatsun Agro | 86,997 | 16.23% | 78.48 |
| Dodla Dairy | 37,200 | 18.49% | 32.94 |
| Parag Milk Foods | 34,322 | 11.61% | 24.91 |
| Nestle India | 202,015 | 79.99% | 72.95 |
Key Strengths & Risks
Strengths
- Product Mix: 100% Value-Added Dairy Products (VADP). No low-margin liquid milk sales.
- Logistics: Fully owned logistics fleet (reefers) ensuring cold chain integrity.
- Technology: High adoption of automation (Robotic paneer lines, SmartChef).
- Brand: Strong recall in South India.
Risks
- Geographic Concentration: 71% of revenue comes from South India.
- Raw Material: No long-term contracts with farmers; susceptible to milk price volatility.
- Competition: Intense competition from cooperatives (Amul) and FMCG giants (Britannia, Nestle).
Conclusion
The Milky Mist IPO is a strong candidate for investors looking for growth in the consumption theme. The fundamental shift from a debt-heavy balance sheet to a net-cash or low-debt balance sheet post-IPO will be the primary driver for shareholder value creation. Investors should keep a close watch on the Price Band valuation. If priced at a discount to Hatsun Agro, it leaves room for listing gains.
Disclaimer: This post is for educational purposes based on the DRHP filed with SEBI. It does not constitute financial advice. Please consult your financial advisor before investing.
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