The initial public offer (IPO) of Dodla Dairy has been subscribed 3.16 times on June 17, the second day of bidding.
According to the subscription data available on the exchanges till 16:15 IST, the offer has received bids for 2,69,00,125 equity shares against the IPO size of over 85,07,569 equity shares.
Dodla Dairy IPO offer 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. The price band for the offer has been fixed at Rs 421-428 per equity share.
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.
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.
"Considering FY 21 annualized EPS of 26.08 on a post-issue basis, the company is going to list at PE of 16.41X with a market cap of Rs.25,463 mn while its listed peers namely Hatsun Agro and Parag Milk are trading at a PE of 81.1X and 67.6X. ," said analysts at Marwadi Financial Services.
Analysts have given a 'subscribe' rating to the issue as the company is one of the largest dairy companies in the branded consumer market with a strong distribution network and is available at a reasonable valuation compared to its peers.
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.
The funds raised through the IPO will be utilised for repaying debts of Rs 32.26 crore availed from ICICI Bank, the Hongkong and Shanghai Banking Corporation (HSBC), and HDFC Bank, and for capital expenditure requirements of around Rs 7.15 crore.
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.
They are among the private dairy players with a significant presence in the southern region of India and have the third-highest position in terms of milk procurement per day with an average procurement of 1.03 million liters of raw milk per day ("MLPD") and second highest in terms of market presence across all of India.
The Hyderabad-based company has a strong distribution network of 40 sales offices, 3336 distribution agents, 863 milk distributors, and 449 product distributors across 11 states in India.
Allotment of shares for the Dodla Dairy IPO is likely to be carried out on June 23, 2021, and the tentative date of listing on BSE and NSE is June 28.
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