Milky Mist takes a step towards ₹2,000 crore IPO, picks investment bankers
2025 is set to be a milestone year for Erode-based food products major Milky Mist. The company has started its process to go public by picking investment bankers for the issue. JM Financial and IIFL Capital Services are among the bankers running the process, as per sources.
The company, which deals with a vast portfolio of milk, cheese, paneer, ice creams and more, is said to be looking at a ₹2,000 crore Initial Public Offering (IPO) at a steep valuation of ₹20,000 crore, which is almost three times compared to its last known valuation in 2023. It is eyeing listing by the end of 2025.
Milky Mist closed FY24 with a top-line of around ₹1,900 crore and logged an EBITDA of roughly 14 per cent. It has been expanding into various value-added products such as ice creams, chocolates, Greek yogurt, and desserts in recent times through debt financing and internal accruals. The IPO proceeds are targeted towards repayment of debt and for expanding both manufacturing and distribution network nationally.
Diversified product portfolio
The company executives declined to comment on the specifics of the IPO but noted that they did explore private equity capital but then realised that it was for businesses that needed “hand-holding” for growth, but in their case they had their own clear growth strategies and hence leaned toward public listing.
“Our focus is on achieving high quality through automation and improving volumes through higher capacity and state-of-the-art machinery,” said Milky Mist CEO K Rathnam. Commenting on business performance amid a consumption slowdown, he noted they have a well-diversified portfolio of products with more than 60 per cent in the nature of everyday essentials and growing revenue at roughly 30 per cent.
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Launched by founder T Sathish Kumar, who dropped out of school to help out with his father’s milk business, Milky Mist started paneer production in 1994. Today, it has a fully automatic Paneer processing plant in Erode. It has since then added a line up of over 20 value-added products, which it distributes with a fully-owned logistics chain.
Market data shows there are just around 5-6 listed players based out of Erode and Milky Mist will be among this handful of companies from the city to raise from public markets.
‘Decision expected’
“Entrepreneurs from Coimbatore and other parts of Western TN have long been at the forefront of raising money from public markets and to that end, Milky Mist’s decision is expected,” a TN-based investor said. “I do not see them as just a dairy player and there are not many others in the end-to-end value-added space that Milky Mist is today in,” he added.
“Billion-dollar valuations does not always reflect a company’s true value…We must instead focus on building great products that creates a sustainable and profitable business. Many businesses, including Milky Mist have thrived without the “unicorn” label,” Satish Kumar recently wrote in a post on X.
Hatsun Agro, Heritage Foods, Parag Milk Foods, and Dodla Dairy are a few listed dairy players.
