Dodla Dairy launched its initial public offer (IPO) today. The issue will close on June 18. Price band for the offer has been fixed at Rs 421-428 per equity share. The dairy firm plans to raise Rs 520 crore through the share sale. This is the third IPO this week after Sona Comstar and Shyam Metalics.
Here's a look at all you need to know before placing bid in the share sale.
The leading dairy company of South India has raised a little over Rs 156 crore from anchor investors. SBI Mutual Fund (MF), Aditya Birla Sun Life MF, Edelweiss MF, Kuber India Fund, Saint Capital Fund and Integrated Core Strategies Asia Pte among others took part in the anchor bidding.
Axis Capital and ICICI Securities are the investment bankers for the IPO. Equity shares of the firm will be listed on NSE and BSE. The share sale comprises a fresh issue of up to Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by promoters and investors.
Dodla Sunil Reddy, Dodla Sesha Reddy, and Dodla Family trust are the company promoters.
The offer for sale consists of 92 lakh equity shares by investor TPG Dodla Dairy Holdings, and 4,16,604 equity shares by Dodla Sunil Reddy, 10,41,509 equity shares by Dodla Family Trust, and 3,27,331 equity shares by Dodla Deepa Reddy.
Allotment of shares for the Dodla Dairy IPO is likely to be carried out on June 23, 2021 and tentative date of listing on BSE and NSE is June 28.
Bids for the IPO can be placed in a lot size comprising 35 shares for which one will have to spend Rs 14,980. One can apply for a maximum 13 lots comprising 455 shares for Rs 1,94,740.
The share sale comprises a fresh issue of up to Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by promoters and investor.
Analysts have given a thumbs up to the prospects of the IPO.
Geojit gave a subscribe call to the IPO .
"At the upper price band of Rs 428, Dodla Dairy is available at P/E of 16.4x (annualized basis on FY21E EPS of Rs 26.1) which appears fully priced. We assign a "Subscribe" rating for the issue on a long-term basis considering the significant market presence, brand visibility, plans to launch new milk products in the near term and lean balance sheet," the brokerage said
Hem Securities too has given a subscribe call to the issue.
"Company is bringing the issue at price band of Rs 421-428 at p/e multiple of approx. 16 on post issue annualized FY21 eps which looks reasonable. Topline has increased at a CAGR of 15.98% over fiscal 2018 to fiscal 2020 while its EBITDA increased at a CAGR of 11.81%. Despite cumulative capital expenditure of Rs 2,644.86 million over the past three years, towards commissioning & acquisition of new processing plant and establishment of new VLCCs, company's return on equity and return on capital employed for fiscal 2020 were at 11.50% and 17.01%, respectively," the brokerage said.
Anand Rathi is also positive on prospects of the IPO.
"Considering the company has a diversified product basket, strong brands and wide distribution network, we believe that the company will continue to perform well on both the top-line and the bottom-line front. Hence, we recommend investors to Subscribe to the issue from a longer term perspective," the brokerage said.
Dodla Dairy Limited is an integrated dairy company in South India that is engaged in the procurement, processing, distribution, and marketing of milk and other dairy products.
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