DODLA DAIRY LIMITED IPO

Incorporated in 1995, Dodla Dairy Limited is an integrated dairy company based in south India deriving its revenue primarily from the sale of milk and dairy-based products in the consumer market for the FY 2020 and six months period ended September 30, 2020. As per CRISIL reports, out of the private dairy players operating in southern India, Dodla Dairy is the 3rd largest company as of 31st December 2020 in terms of per day milk procurement with its average number of 1.02 million liters of raw milk per day. Also, the company ranks second highest as per reports in terms of market presence across India among private dairy companies with a significant market share in southern India.

The main operations of the company are across the 5 Indian states which are Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, and Maharashtra. As of 31 December 2020, this consists of an average procurement of 1.02 million liters of raw milk per day from approx 1,14,920 farmers through 6,624 VLCCs (Village Level connection Centres), 254 dairy farms, and third party suppliers. The company processes & sells milk of different varieties like full cream, standardized, toned & double toned along with other dairy-based products such as curd, UHT milk, butter, ghee, flavored milk, ghee, and ice creams, etc. Their revenue from the sale of milk and other dairy products constituted 72.81% & 27.18% of their revenue in FY20 and 74.45% & 25.55% for the six months ended 30th September 2020.

The revenue from operations of the company increased at a growth rate of 15.98% over Fiscal 2018 to 2020. As of FY 2020, the revenue was 2,139 crores, EBITDA was 140 crores while experiencing an increase of 11.81% during the period of FY 2018-2020 and PAT was 49.87 crores. Their sales increased from 1,589 crores in Fiscal 2018 to 2,136.16 crores in Fiscal 2020.

The promoters of the company are Dodla Sunil Reddy, Dodla Sesha Reddy, and Dodla Family Trust.

Strengths of the company:

Customer-focused company with a diversified product portfolio under the “Dodla Diary” & “Dodla” brands.
Has an integrated business model with procurement, processing, and distribution capabilities.
Long term relationships & focused engagement with dairy farmers
The company has rigorous quality control frameworks
Delivered consistent financial growth over the last years
Has an experienced senior management team

Purpose of the IPO:

Repayment or pre-payments of the borrowings of the company
To fund the capital expenditure requirements of the company
For general corporate purposes

Financial Performance of the company:

	For the six-month period ended 30th September 2020	FY 2020	FY 2019	FY 2018
Total Revenue	918.22	2,145.64	1,699.45	1,597.01
Total Expenses	812.48	2,063.77	1,606.17	1,516.57
Profit After Tax	74.77	49.87	62.76	56.85
Total Assets	818.32	800.30	751.92	608.96

*All the values are in crores and as per DRHP.

Valuation of the Company:

	For the six-month period ended 30th September 2020	FY 2020	FY 2019	FY 2018
Basic Earnings per Share (EPS)	13.43	8.96	11.27	10.21
Diluted Earnings per Share (EPS)	13.43	8.96	11.26	10.21
Return on Net Worth (%)	14.72%	11.50%	15.44%	16.74%
Net Assets Value per Equity share	91.23	77.87	72.99	60.99

*As per RHP.

Dodla Dairy Limited IPO DRHP

IPO details:

Face Value	₹10 per equity share
Market Lot	35 Shares
Minimum Order Quantity	35 Shares
Price Band	₹421- ₹428 per equity share
Issue type	Book Built Issue IPO
Issue Size	₹520.18 Crores
Fresh Issue	₹50 Crores
Offer for Sale	₹470.18 Crores
Listing	NSE, BSE

Important IPO dates:

Open Date	16th June 2021
Close Date	18th June 2021
Basis of Allotment Date	23rd June 2021
Initiation of Refunds	24th June 2021
The credit of shares to Demat Account	25th June 2021
Listing Date	28th June 2021

Allocation Quota:

Category	Portion
Qualified Institutional Buyers (QIBs)	Not more than 50%
Non- Institutional Buyers (NIIs)	Not less than 15%
Retail Investors	Not less than 35%

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