Parag Milk Foods files for IPO to raise Rs325 crore
Parag’s IPO also includes an offer for sale through which the promoters and PE investors will sell part of their holding in the firm
Mumbai: Dairy firm Parag Milk Foods Ltd and infrastructure firm GVR Infra Projects Ltd on Thursday filed their draft initial public offering (IPO) papers with the capital markets regulator Securities and Exchange Board of India (Sebi).
Parag, backed by IDFC Alternatives and Motilal Oswal Private Equity Advisors Pvt. Ltd, plans to raise about Rs.325 crore, according to the draft red herring prospectus (DRHP), available on the websites of its investment banks.
Parag’s IPO also includes an offer for sale (OFS) through which the promoters and private equity investors IDFC Alternatives and Motilal Oswal will sell part of their holding in the firm.
According to two people involved in the issuance, including the OFS part, the total size of the IPO would be about Rs.900 to Rs.1,000 crore.
According to the firm’s DRHP, IDFC Alternatives and Motilal Oswal hold 19.21% and 9.11% stake in the company. The two are looking to sell the majority of their holding through the IPO.
In September 2012, the company had raised Rs.155 crore from IDFC Alternatives. Motilal Oswal had invested Rs.55 crore in 2008.
Parag Milk plans to use the proceeds of the IPO to meet capital expenditure (capex) requirements in relation to expansion and modernization of existing manufacturing facilities at Manchar, Palamaner and Bhagyalaxmi and to improve the marketing and distribution infrastructure.
In 2014-15, Parag Milk Foods reported a revenue of Rs.1,440.8 crore, up from Rs.1,087 crore in the previous year. It reported a profit of Rs.29.4 crore in 2014-15, up from Rs.14.5 crore.
Kotak Mahindra Capital Co. Ltd, JM Financial Institutional Securities Ltd, IDFC Securities Ltd and Motilal Oswal Investment Advisors Pvt. Ltd are managing the Parag Milk IPO.
In a separate filing, GVR Infra said it plans to raise Rs.400 crore through its IPO.
The firm plans to use the IPO proceeds to fund working capital requirements, reduction of outstanding amount under short-term borrowings and funding general corporate purposes.
IDFC PE, which had invested Rs.150 crore in the GVR Infra in 2012 and holds 21.4% stake in the company, will be selling 4.32 million shares in the IPO, bringing down its holding to 12.3%. GVR Infra has hired Edelweiss Financial Services Ltd, Ambit Corporate Finance Pvt. Ltd, SBI Capital Markets Ltd and IDFC Securities to manage the IPO.
So far this year, 15 companies have raised Rs.6,348 crore through IPOs, according to data from Prime Database, a capital markets tracker. This is already more than the entire sum raised in the last two years.
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