Dodla Dairy IPO final day – subscribed 18 times, QIB portion booked 13 times

On June 18, the final day of bidding for Dodla Dairy’s public offering, the offer received bids for 15.63 crore equity shares against the IPO size of 85.07 lakh equity shares.

The integrated dairy company situated in the South is seeking to raise Rs 520.17 crore through a public offering that would include a fresh issue of Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by existing selling owners, including TPG Dodla Dairy Holdings Pte Ltd.
So far, eligible institutional purchasers have bid 13.02 times their reserved amount, while non-institutional investors have bid 47.22 times.

A portion of the offering designated for retail investors has been subscribed to 9.08 times. They are permitted to invest up to Rs 2 lakh in the IPO, which means they can apply for Dodla Dairy shares valued a minimum of Rs 14,980 and a maximum of Rs 1,94,740.

The net proceeds from the new issue will be used to repay existing debt (Rs 32.26 crore).

On June 15, the business raised Rs 156 crore from anchor investors at the upper end of the pricing band of Rs 421-428 per equity share.

Dodla Dairy has consistently grown revenue and EBITDA (earnings before interest, tax, depreciation, and amortisation) over the last three financial years, growing at a CAGR of 15.98 percent and 11.81 percent, respectively, by selling milk and dairy-based value-added products (VAPs) in the branded consumer market.

“In terms of valuation, the 9MFY21 annualised PE of 16.4x (at the upper end of the issue price band) is low in comparison to Parag Milk Foods (trading at 32.7x). Additionally, Dodla Dairy has demonstrated an increase in operating margins through an efficient working capital cycle “Angel Broking stated.

It operates in five states in India: Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, and Maharashtra, as well as in Uganda and Kenya.

The brokerage believes that Dodla Dairy will perform better in the future as a result of its increased value-added product mix. As a result, it advised that the problem be subscribed to.

Image: From Dodla Diary’s website

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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