Milky Mist's paneer heft to help it take on cooperative giants

Mumbai: After global dairy majors found it tough to crack India's cooperative-led dairy market, the Tamil Nadu-based Milky Mist is betting on a different strategy. It is headed to the stock market with a focus on value-added dairy products rather than milk in pouches, seeking to compete with giants such as Amul and Mother Dairy.

“In the last few years, transformation is happening from the unorganized to organized sector,” Satish Kumar T, chairman and managing director of Milky Mist, told Mint.

Milk in pouches is among the most popular packaged food products in India. “It is not necessary to be present in the milk category. Since we established it as an entire product range, we see a lot of advantages there,” K. Rathnam, chief executive officer, said.

Milky Mist's portfolio includes paneer, cheese, butter, curd, yoghurt, buttermilk, milkshakes, chocolate, ice cream and frozen food items such as parotta.

Competition from cooperative dairy players is massive in India.

The Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand, saw its total turnover cross the ₹1 lakh crore mark in fiscal year 2026. On the other hand, the Noida-based Mother Dairy reported an FY26 revenue of ₹20,300 crore, up 17% from the previous year.

French multinational food giant Danone entered the mainstream dairy business in India in 2011, eventually shutting down its local dairy operations around 2018 due to competition from the cooperatives. Other global giants such as Lactalis have adapted through local acquisitions.

The initial public offering (IPO) of Milky Mist Dairy Food Ltd will open for subscription on 11 August and close on 13 August. The company has fixed the price band at ₹133-140 per share of face value ₹2.

In the last decade, domestic dairy players such as Parag Milk Foods and Dodla Dairy listed on the stock exchanges. Shares of the sector players have trended down this year amid inflationary pressures—milk prices were raised due to the war-triggered spikes in packaging and transportation costs.

Shares of Parag Milk Foods are down nearly 25%, Heritage Foods 21.1%, Dodla Dairy nearly 15% and Hatsun 4.8% lower from January on the National Stock Exchange, as against a 5.8% decline in the benchmark Nifty 50. These players are also expanding into the value-added segment from their pouch milk focus.

Financial performance

Milky Mist cut its IPO size to ₹1,553 crore from the ₹2,035 crore proposed in the draft red herring prospectus (DRHP) filed last July, following the company's ₹357-crore pre-IPO fundraising.

Following the pre-IPO placement, the promoters hold a 93% stake in the company, while public shareholders own the remaining 7%, including Jongsong Investments, a Temasek Holdings subsidiary, which holds a 5.16% stake.

The company intends to use ₹496.8 crore from the fresh issue proceeds towards the repayment or prepayment of debt, which was at ₹1,390.7 crore as of May 2026. It will also invest ₹469.2 crore to expand and modernize its Perundurai manufacturing facility in Tamil Nadu, while ₹155.3 crore will be allocated for deploying visi-coolers, ice cream freezers, and chocolate coolers. The remaining proceeds will be used for general corporate purposes.

The company has high regional concentration, with South India contributing 69.23% of the revenue in FY26. Among its products, paneer brought in 29.42% of the revenue, making Milky Mist the largest paneer maker in South India, with a 60% market share.

The company had an earnings before interest, taxes, depreciation, and amortization (Ebitda) margin of 13.87% in FY26, significantly higher than its competitors as its products sell at a 10-25% premium to the average market price.

“Post GST-cut, industry demand has benefited from reduced prices or increased grammage (c.10% higher volumes on small SKUs),” said analysts at Systematix Institutional Equities in a December 2025 report on the dairy sector. “But margins were impacted to an extent from disruption in channels and supply chains.”