The initial public offering (IPO) of Dodla Dairy saw strong demand from investors as the issue was subscribed 3.3 times on Thursday, the second day of the bidding process. The issue was fully subscribed on Wednesday.
By 5:00 pm, IPO had received bids for 2,80,50,960 shares, which was 3.3 times the total issue of 85,07,569 shares, data from NSE showed. The company is selling its shares in the fixed price band of Rs 421-428 under the IPO.
It is trying to sweep Rs 520 crore via its primary float. The issue comprises an offer for sale of up to Rs 470 crore and fresh issuance of shares worth up to Rs 50 crore.
At the upper end of this price band, the company is demanding a post-issue annualised FY21 PE of 16.4 times. The asking valuations are at par with Heritage Food but lower than Parag Milk Foods’ 32.7 times and Hatsun Agro’s 81 times FY21 earnings. Except for Hatsun Agro, the remaining dairy stocks are trading quite below their record high levels.
Dodla Dairy had said on Tuesday that it had raised a little over Rs 156 crore from anchor investors ahead of its initial share sale. The company allocated a total of 36,46,099 equity shares at Rs 428 apiece to anchor investors for Rs 156.05 crore.
The South India-based dairy company had on February 2 this year executed a private placement, allocating 26.5 lakh shares to International Finance Corporation at Rs 377 apiece.
Dodla Dairy is the third largest player in terms of milk procurement per day, with an average procurement of 1.03 million litres of raw milk per day (MLPD), as of March 31, 2021.
The company’s processing operations are spread across 13 processing plants located in the states of Andhra Pradesh, Telangana, Karnataka and Tamil Nadu in India, with an aggregate installed capacity of 1.70 MLPD.
Over FY18-20, Dodla’s revenues rose 16 per cent annually and Ebitda by 12 per cent annually. PAT fell 6 per cent annually during the same period. Value products that accounted for 27.18 per cent of total revenues in FY20 commanded 24.68 per cent of the revenue pie in the first nine months of FY21.