The IPO was open for subscription from August 11 to August 13 and was subscribed 56.12 times by the end of the three-day bidding period.
Qualified institutional buyers (QIBs) led the demand, with their portion subscribed 155.83 times. The non-institutional investors’ (NIIs) category was subscribed 34.91 times, while the retail portion saw 8.41 times subscription.
Milky Mist Dairy Food had set the IPO price band at ₹133-140 per share.
At the upper end of the price band, the issue valued the Tamil Nadu-based dairy products maker at around ₹10,778 crore, which is a little more than half the market capitalisation of listed peer Hatsun Agro Product.
The company had downsized its IPO to ₹1,553 crore from the earlier proposed ₹2,035 crore following a pre-IPO investment by Jongsong Investments, a subsidiary of Singapore’s state-owned investment firm Temasek.
The IPO comprised a fresh issue of ₹1,428.2 crore and an offer for sale (OFS) of ₹125 crore by existing shareholders.
Jongsong Investments currently holds around 5.2% in Milky Mist after acquiring shares at ₹139.76 apiece through a pre-IPO placement in April.
Milky Mist manufactures a range of dairy products, including cheese, butter, paneer, ghee, yoghurt and ice cream. The company plans to use the fresh issue proceeds to repay debt and expand and modernise its flagship manufacturing facility at Perundurai, Tamil Nadu.
Growth, margins in focus
Milky Mist has grown at an annual rate of more than 30% over the past several years and believes it can sustain that pace as it scales up, according to management.
Whole-time Director and CEO K Rathnam said the dairy industry is growing at around 12-20% in value terms, while Milky Mist is expanding at more than 30%. The company’s volume growth is around 25-30%, with value growth exceeding 30%, he said.
Milk procurement costs remain a key variable for the company, with prices typically moving through cycles over two to four years.
However, Rathnam said the company’s focus on value-added products such as paneer and cheese, which carry higher margins than liquid milk, provides some cushion against fluctuations in raw milk prices.
He also pointed to Milky Mist’s milk-balancing system as a factor supporting margins.
Within its portfolio, paneer and cheese command the highest margins, while ghee, followed by yoghurt and ice cream, have relatively lower margins. Rathnam said the margin profile is broadly in line with the wider dairy industry and does not reflect a company-specific weakness.
As part of the OFS, promoter Sathishkumar T and his wife will sell part of their holdings. Promoter ownership is expected to decline to around 79% following the IPO, after which the company will need to bring it down further to 75% within three years to meet minimum public shareholding requirements.
Milky Mist’s listed peers have faced margin pressure this year amid elevated milk procurement costs and broader weakness across the dairy market, making the company’s ability to protect margins and sustain its premium-product-led growth an important factor for investors to watch.
