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The maker of natural ice cream brand NIC is in early discussions with several mid-market private equity firms to raise 250-300 crore ($31.3-37.5 million), said two people aware of the matter.

Pune-based Walko Food Co. Pvt. Ltd wants to use the fresh capital to drive its expansion plans, said the people cited above on the condition of anonymity.

Lighthouse, Gaja Capital, TPG Capital, TA Associates, Norwest Venture Partners, Kedaara Capital and ChrysCapital are among the potential investors holding discussions with Walko Food, one of the two people said.

Homegrown JM Financial Private Equity, already an investor in Walko Food, is also expected to invest in the round, the person said.

The company has hired financial services firm EY to advise on the fundraising exercise, said the second person.

Queries emailed to Walko Food and EY remained unanswered. Kedaara Capital declined to comment. Queries emailed to other potential investors also remained unanswered.

Walko Food was founded in 2012 by Jeetendra Bhandari, who had earlier worked with Coca-Cola and Walmart.

The company retails its products through a chain of parlours as well as quick-commerce platforms. It sells more than 50 ice cream flavours through 16 parlours. The company also has a presence at 250 pickup points in more 86 cities across 20 states.

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Walko Food is planning to expand its portfolio of sugar-free ice creams from two to six flavours, besides expanding into the Middle East.

NIC’s gross sales have grown from 9.65 crore in FY18 to 56.50 crore in FY21 and 166 crore in FY22.

The ice-cream flavours include fruit, dry fruit variants and international tastes like sea salted caramel, Madagascar chocolate, French vanilla, and ones inspired by Indian sweets such as gulab jamun, sheer khurma and gajar halwa.

According to an analyst tracking the sector, the company has grown considerably over the last couple of years, riding on the popularity of quick-commerce startups such as Zepto, Blinkit and FroGo.

The company is expected to clock a revenue run rate of more than 200 crore by the next financial year, said the people cited above.

In its last institutional funding round in June 2021, NIC had raised 35 crore from JM Financial Private Equity Fund II.

Besides popular brands such as Amul and Mother Dairy, regional players that populate the ice cream market in India include Arun Icecreams, Havmor and Dairy Classic. International brands such as Baskin-Robbins, Häagen-Dazs and London Dairy have also marked their presence in the country.

However, not too many deals have been reported in the segment of late. In July 2020, NOTO, a healthy ice cream brand, had raised funding in a pre-seed round led by WEH Ventures.

In 2018, mid-market private equity firm BanyanTree Capital had acquired the entire food business of an ice-cream chain in the National Capital Region (NCR).

A year earlier, South Korean conglomerate Lotte Confectionery Co. Ltd agreed to buy Havmor Ice Cream Ltd for 164.5 billion won ($152 million, or 978 crore at the time) to establish a foothold in India.

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