Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Prabhat Dairy raises `140 crore
BackBack

Prabhat Dairy raises `140 crore

The dairy firm plans to use the money to set up a new manufacturing facility in Mumbai and expand other facilities

This is the first round of funding for Prabhat Dairy, which was founded in 1998 and exports to the US, the UK and Africa. Its products are available under brands such as Prabhat, Flava and Milk Magic. Photo: Mint (Mint)Premium
This is the first round of funding for Prabhat Dairy, which was founded in 1998 and exports to the US, the UK and Africa. Its products are available under brands such as Prabhat, Flava and Milk Magic. Photo: Mint
(Mint)

Mumbai: Prabhat Dairy Pvt. Ltd has received 140 crore from India Agribusiness Fund, and French development finance institution Proparco. Of this, IAF, a private equity (PE) fund sponsored by Rabobank Group invested 80 crore.

This is the third investment by a private equity fund in a dairy business in India this year, according to VCCEdge, which tracks investments by private equity and venture capital funds. Earlier this year, International Finance Corp. (IFC) invested $17 million in Parag Milk Foods Pvt. Ltd and Aavishkaar India II Co. Ltd invested $1.17 million in Milk Mantra Dairy Pvt. Ltd.

Prabhat Dairy plans to use the money to set up a new manufacturing facility in Mumbai for milk, yoghurt and ice-cream and expand its facilities in Maharashtra’s Ahmednagar district to include products such as cheese and high-temperature processing.

“We remain focused on implementing our strategy of being a key supplier of value-added, dairy-based ingredients to multinationals and large domestic companies," Sarangdhar Nirmal, chairman, Prabhat Dairy, said in a statement.

KPMG Corporate Finance LLC was the financial advisor on the transaction.

This is the first round of funding for Prabhat Dairy, which was founded in 1998 and exports to the US, the UK and Africa. Its products are available under brands such as Prabhat, Flava and Milk Magic. Prabhat Dairy collects more than 800,000 litres of milk daily from over 65,000 farmers and processes it at plants located in Shrirampur in Ahmednagar, Maharashtra.

This is India Agribusiness Fund’s first investment in a dairy. It is the first PE fund in the country focused on the food and agribusiness sector. Since its launch in November 2008, the fund has invested in firms such as LT Foods Ltd, GeePee Agri Pvt. Ltd, Daawat Foods Ltd and Global Green Company Pvt. Ltd. “It (Prabhat Dairy) is a differentiated company with B2B (business to business) model, which is different from selling products directly," said Rajesh Srivastava, chairman and managing director, Rabo Equity.

India Agribusiness Fund is now raising its second fund and is targeting a corpus of $200 million. Srivastava said the first close (after which investments can be made from the fund) will happen in two months. “Our focus will remain food and agribusinesses," he said.

In May 2010, Carlyle Asia Growth Partners IV invested $22 million in Tirumala Milk Products Pvt. Ltd. Though there was a lull, the latter half of last year saw a few deals in this sector. For example, Cargill Ventures invested $20 million in Dodla Dairy; Ambit Pragma invested an undisclosed amount in Neo Anurena Tristar Food Products Pvt. Ltd; and IDFC Private Equity Fund III invested 155 crore in Parag Milk Foods Pvt. Ltd.

“The early investments in dairy space were made by investors who essentially had greater risk appetite. Now, looking at their experience, relative comfort is starting to come in the mind of other investors for backing such businesses," said Sanjeev Krishan, executive director, PricewaterhouseCoopers Pvt. Ltd. “Presence of PE investors has ensured that some systematic improvements have taken place and governance standards are getting relatively better."

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 27 Aug 2013, 11:36 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App